Treasury  Department    :    :    Bureau  of  Internal  Revenue 


Bulletin  "H" 


INCOME   TAX   RULINGS 

PECULIAR  TO 

INSURANCE  COMPANIES 


April  9.  1921 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1921 


Treasury  Department    :    :    Bureau  of  Internal  Revenue 


Bulletin  "H" 


INCOME   TAX   RULINGS 

.    PECULIAR  TO 

INSURANCE  COMPANIES 


April  9,  1921 


WASHINGTON 

GOVERNMENT  PRINTING  OFTICE 

1921 


PREFACE. 

This  bulletin  is  issued  for  the  use  of  employees  of  the  Bureau  en- 
gaged in  the  computation  of  the  income  and  excess  profits  taxes  of 
insurance  companies  and  for  the  information  of  interested  taxpayers. 
It  is  not  intended  as  a  set  of  regulations  or  as  an  amendment  of  the 
present  Regulations  45  (1920  edition)  but  solely  as  a  statement  of 
the  practice  which  has  been  established  under  those  regulations. 
While  not  a  complete  manual  of  practice,  it  answers  most  of  the  ques- 
tions which  present  themselves  in  everyday  practice. 

(2) 


r:^c^3t>3-V^Vt^ 


CONTENTS. 


LIFE  INSURANCE  COMPANIES. 

Paragraph.  Pag!\ 

1.  Basis  of  returns 5 

2.  Gross  income  of  life  insurance  company 5 

3.  Premiums  reported  during  tlie  year  on  monthly  lists  to  War  Risk 

Insurance  Bureau.    Item  20(a) 5 

4.  Ledger  assets  other  than  premiums  received  from  other  companies 

for  assuming  their  risks.    Item  23 5 

5.  Miscellaneous  income.    Item  36 6 

(a)  Commissions  advanced  in  previous  years  now  repaid 6 

( 6 )  Bonuses  received  for  payment  or  extension  of  mortgage  loans_  6 

6.  Exclusions  from  gross  income 6 

7.  Deductions  allowed  life  insurance  companies 7 

8.  Reserve  funds  of  life  insurance  companies 7 

9.  Dividends  and  interest  held  on  deposit  surrendered  during  the  year. 

Item  18 7 

10.  Invested  capital 7 

11.  Invested  capital  of  mutual  life  insurance  companies.^. 8 

12.  Computation  of  invested  capital 8 

13.  Computation  of  invested  capital  for  prewar  years 9 

14.  Uncollected  and  deferred  premiums 0 

STOCK   FIRE  INSURANCE  COMPANIES. 

1.5.  Ba.sis  of  return 9 

16.  Change  of  basis 0 

17.  Premium  income 9 

18.  Deposit   premiums 9 

19.  Investment  income 10 

20.  Miscellaneous  income 10 

21.  Increase  in  liabilities   during  the   year  on  account  of   reinsurance 

treaties 10 

22.  Items  not  to  be  Included  in  gross  income 10 

23.  Policy  payments ^ 10 

24.  General  expenses  and  taxes 10 

25.  Net  addition  to  reserve  funds 10 

26.  Decrease  in  liabilities  during  the  year  on  account  of  reinsurance 

treaties 10 

27.  Items  not  to  be  included  among  deductions 11 

28.  Invested  capital  of  fire  insurance  companies 11 

STOCK  MARINE  INSURANCE   COMPANIES. 

29.  Net  Income  and  Invested  capital 12 

STOCK  CASUALTY  COMPANIES. 

30.  Basis  of  return 12 

31.  Readjustment  of  returns 12 

32.  Gross  incdbae , 12 

(3) 


Page. 

83.  Policy  fees  required  or  represented  by  application.    Item  21 12 

34.  Compensation  for  inspections 13 

35.  Miscellaneous  income 13 

36.  Payments  on  policies.    Item  17 13 

37.  Addition  to  reserve  funds.    Items  20  and  26 13 

38.  Net  additions  to  reserve  funds 13 

39.  Health  and  accident  companies 13 

40.  Estimated  expenses  of  investigation  and  adjustment  of  unpaid  claims. 

Item  21 13 

41.  Invested  capital 13 

42.  Computation  of  invested  capital 14 

MUTUAL  INSURANCE  COMPANIES. 

(Other  than  mutual  life  and  mutual  marine  insurance  companies.) 

43.  Mutual  insurance  companies    (other  than   mutual  life  and  mutual 

marine  insurance  companies) 15 

44.  Reciprocal  insurance  exchanges  or  associations 15 

MUTUAL  MARINE  INSURANCE  COMPANIES. 

45.  Special  deductions  allov^ed  mutual  marine  insurance  companies 15 

CORPORATIONS  ISSUING  COMBINATION  POUCIES. 

46.  Corporations  issuing  combination  policies 16 

FOREIGN  INSURANCE  COMPANIES. 

47.  Gross  income 16 

48.  Income  not  subject  to  tax 16 

49.  Inconre  from  United  States  bonds 17 

50.  Company  having  agent  in  United  States 17 

51.  Deductions  allowed  foreign  insurance  companies 17 

52.  Rate  of  exchange 17 

53.  Computation  of  tax  of  foreign  insurance  companies 17 

EXEMPTIONS. 

54.  Mutual  insurance  companies  and  like  organizations 17 

55.  Mutual  savings  banks 18 

56.  Fraternal  beneficiary  societies 18 

57.  Insurance  association  incorporated  to  permit  automobile  owners  to 

exchange  contracts  of  insurance  and  indemnity IS 

58.  Mutual  health  and  accident  associations 19 

59.  Travelers'  associations '. 19 

60.  Mutual  liability  insurance  company  deriving  its  income  in  part  from 

'            premiums 19 

61.  Proof  of  exemption 19 

GENERAL  PROVISIONS. 

62.  Net  addition  to  reserve  funds  of  insurance  companies 20 

APPENDIX. 

Page. 

Annual  statement,  life  companies,  convention  edition 23-32 

Annual  statement,  stock,  fire,  and  marine  companies,  convention  edition 33^2 

Annual  statement,  miscellaneous  stock  companies,  convention  edition 43-62 


LIFE  INSURANCE  COMPANIES. 

1.  Basis  of  returns. — Returns  of  life  insurance  companies  shall  be 
made  on  a  receipts  and  disbursements  basis,  as  distinguished  from 
an  accrual  basis,  as  being  in  accordance  with  the  method  of  ac- 
counting regularly  employed  by  such  companies.  Any  life  insur- 
ance company  having  life  and  casualty  departments  shall  report 
separately  the  incomes,  disbursements,  and  liabilities  of  the  two 
departments,  of  the  life  department  upon  the  basis  of  receipts  and 
disbursements,  of  the  casualty  department  on  an  accrual  basis. 

2.  Gross  income  of  life  insurance  company. — The  gross  income  of  a  life 
insurance  company  consists  of  its  total  revenue  from  the  operation 
of  the  business  and  all  other  income  from  all  other  sources  within 
the  taxable  year,  except  as  otherwise  provided  by  the  statut€. 
Gross  income  includes  net  premium  receipts  (that  is,  gross  pre- 
miums less  returned  premiums  on  policies  canceled,  premiums  on 
policies  not  taken,  and  such  portions  of  any  premiums  received  from 
individual  policyholders  as  are  paid  back  or  credited  to  or  treated 
as  abatements  of  premiums  of  such  policyholders  within  the  taxable 
year),  investment  income,  profit  from  the  sale  of  assets,  and  all 
gains,  profits,  and  income  reported  to  the  State  insurance  depart- 
ment except  income  specifically  exempt  from  tax  (see  par.  6).  A 
net  decrease  in,  or  release  of,  reserve  funds  required  by  law  within 
the  taxable  year  must  be  included  in  gross  income  unless  the  com- 
pany affected  shall  show  that  such  decrease  or  release  of  reserve 
funds  resulted  from  the  application  of  reserves  to  the  purpose  for 
which  they  were  established  and  did  not  increase  its  free  assets. 

3.  Premiums  reported  during  the  year  on  monthly  advance  lists  to  War 
Risk  Insurance  Bureau.  Item  20(a)  of  the  report  to  the  State  insurance 
officials,  convention  edition. — This  item  will  be  included  in  income  on 
the  ground  that  the  income  is  received  by  reason  of  the  receipt  of 
cash  or  the  equivalent  of  cash. 

4.  Ledger  assets  other  than  premiums  received  from  other  companies 
for  assuming  their  risks.  Item  23. — This  item  refers  to  the  reinsurance 
of  one  company  by  another  and  does  not  contemplate  the  reinsurance 
of  individual  risks  which  are  charged  through  premium  and  loss 
accounts.  As  a  general  rule  there  is  no  element  of  gain  or  loss  as  a 
result  of  a  reinsurance,  except  in  so  far  as  the  assets  transferred  are 
greater  or  less  than  the  corresponding  liabilities  assumed.  If  there 
is  any  excess  of  the  assets  received  over  the  liabilities  assumed,  the 

(5) 


6 

excess  will  represent  a  gain.  xVnj  assets,  therefore,  received  by  a 
reinsuring  company  and  entered  on  its  books  under  this  item  will  be 
included  in  gross  income  for  tax  purposes.  Payments  made  on  ac- 
count of  liabilities  assumed  will  be  allowed  as  deductions.  If  the 
payments  made  do  not  equal  the  assumed  liabilities,  the  result  is 
that  the  company  is  properly  taxed  upon  the  element  of  gain  arising 
from  the  transaction.  In  so  far  as  the  liabilities  assumed  consist 
of  reserve  liabilities,  the  company  will  secure  an  immediate  deduc- 
tion from  income  by  reason  of  increasing  its  own  reserve  liability  to 
such  an  extent. 

5.  Miscellaneous  income.  Item  36. — Items  appearing  under  this  head 
can  only  be  fully  treated  as  they  are  presented  by  individual  com- 
panies. 

(ft)  Commissions  advanced  in  previous  years  now  repaid. 

Wlien  a  commission  is  advanced  the  security  for  the  subsequent 
repayment  of  the  advance  is  represented  by  commissions  not  j'et 
accrued.  The  company  treats  the  advances  as  disbursements  and  not 
as  capital  transactions.  Having  been  so  treated  when  paid  out,  it 
necessarily  follows  that  the  company  must  return  any  amount  subse- 
quently repaid  as  income.  The  same  reasoning  applies  to  doubtful 
debts  which  require  no  different  treatment  in  the  case  of  insurance 
companies  than  in  the  case  of  corporations  generall3\ 

(6)  Bonuses  received  for  payment  or  extension  of  mortgage  loans. 

TVhen  a  payment  is  received  by  a  company  either  for  the  privilege 
of  extending  a  mortgage  held  by  it,  or  for  the  privilege  of  paying 
the  principal  of  such  mortgage  in  advance,  the  payment  received 
constitutes  gain  and  should  be  included  in  gross  income. 

6.  Exclusions  from  gross  income. — A  life  insurance  company  shall 
not  include  in  gross  income  such  portion  of  any  actual  premium 
received  from  any  individual  policyholder  as  is  paid  back,  or  credited 
to,  or  treated  as  an  abatement  of  premium  of  such  policyholder 
within  the  taxable  year. 

"  Paid  back  "  means  paid  in  cash. 

"  Credited  to  "  means  applied  by  way  of  credit  so  as  to  reduce  the 
premium  received  on  the  policy  for  the  taxable  j'ear.  It  includes 
dividends  applied  (a)  directly  to  the  payment  of  the  premium  for 
the  taxable  year;  (h)  to  purchase  additional  paid-up  insurance  or 
annuities  (Item  8) ;  or  (c)  to  shorten  the  endowment  or  premium 
paying  period  (Item  15)  ;  or  (d)  left  with  the  company  to  accumu- 
late at  interest  (Item  22).  It  does  not  include  the  amount  of  di- 
visible surplus  annually  ascertained  and  apportioned  to  deferred 
dividend  policies. 

"  Treated  as  an  abatement  of  premium "  means  of  the  premium 
for  the  taxable  year. 


Where  the  dividend  paid  back  or  credited  to  a  policyholder  is  in 
excess  of  the  premium  received  from  such  policyholder  within  the 
taxable  year  there  may  be  excluded  from  gross  income  only  the 
amount  of  the  premium  received,  and  where  no  premium  is  received 
from  the  policyholder  within  the  taxable  year  the  company  is  not 
entitled  to  exclude  from  its  premiums  received  from  other  policy- 
holders any  amount  on  account  of  such  dividend  payment. 

7.  Deductions  allowed  life  insurance  companies. — Life  insurance  com- 
panies are  entitled  to  the  same  deductions  from  gross  income  as  other 
corporations,  and  also  to  the  deduction  of  the  net  addition  required 
by  law  to  be  made  within  the  taxable  year  to  reserve  funds  and  of 
sums  other  than  dividends  paid  within  the  taxable  year  on  policy 
and  annuity  contracts.  As  pa3Tnents  on  policies  there  should  be 
reported  all  death,  disability,  and  other  policy  claims  (other  than 
dividends  elsewhere  referred  to)  paid  within  the  year,  including 
matured  endowments,  annuities,  payments  on  installment  policies, 
and  surrender  values  actually  paid.  "  Paid,"  in  the  case  of  a  life  in- 
surance company,  means  actually  paid  as  distinguished  from  ac- 
crued, since  the  returns  are  rendered  upon  the  receipts  and  disburse- 
ments basis. 

8.  Reserve  funds  of  life  insurance  companies. — Generally  speaking, 
Items  7,  8,  and  9  of  the  liability  page  of  the  annual  statement,  con- 
vention edition,  will  be  considered  reserves  as  contemplated  by  the 
statute.  The  net  addition  to  reserve  funds  arising  from  an  increase 
in  survivorship  investment  fund,  is  deductible  from  gross  income. 
An  increase  in  the  reserve  maintained  by  a  life  insurance  company 
for  the  protection  of  deferred  dividend  policies,  where  such  reserve 
is  required  by  statute,  or  by  regulations  promulgated  by  a  State  in- 
surance department  in  the  exercise  of  appropriate  power  conferred 
by  statute,  may  be  deducted  from  gross  income. 

9.  Dividends  and  interest  held  on  deposit  surrendered  during  the  year. 
Item  18. — Dividends  held  on  deposit  will  not  be  allowed  as  deduc- 
tions from  gross  income  in  the  year  in  which  they  are  surrendered, 
inasmuch  as  when  they  are  left  on  deposit  they  are  not  included  in 
income,  and,  therefore,  when  surrendered  are  not  properly  deduct- 
ible. The  interest  paid  thereon,  being  interest  on  indebtedness,  may 
be  deducted  from  gross  income  in  the  year  in  which  it  is  jjaid. 

10.  Invested  capital. — Section  326  of  the  Revenue  Act  of  1918,  and 
article  831  of  Regulations  45,  define  invested  capital  as  including: 

(a)  Cash  paid  in  for  stock; 

(h)   Tangible  property  paid  in  for  stock; 

(c)  Surplus  and  undivided  profits; 

(d)  Intangible  property  paid  in  for  stock  (to  a  limited  amount) : 

(e)  Less  the  same  proportion  of  such  aggregate  sum  as  the 
amount  of  inadmissible  assets  bears  to  the  total  assets. 

Invested  capital  does  not  include  borrowed  capital. 


8 

11.  Invested  capital  of  mutual  life  insurance  companies. — In  the  case 
of  mutual  life  insurance  companies  there  is  no  capital  stock.  Con- 
tributions by  policyholders,  notwithstanding;  that  such  policy- 
holders are  the  owners  of  a  mutual  company,  do  not  constitute  or 
contribute  to  paid-in  surplus.  Contributions  from  policyholders 
aifect  only  earned  surplus.  Invested  capital,  therefore,  will  not  be 
changed  in  any  year  by  the  amount  of  any  such  contributions  of 
policyholders.  The  surplus  of  mutual  life  insurance  companies  is 
generally  derived  through  the  ordinary  course  of  business  in  re- 
taining certain  portions  of  the  excess  of  income  over  the  cost  of 
operation.  All  surplus  is,  therefore,  earned  and  not  paid  in.  For 
the  purpose  of  determining  invested  capital  it  is  necessary  to  in- 
quire as  to  the  proper  measure  of  earned  surplus.  The  books  of  the 
company  do  not  reflect  the  earned  surplus,  they  take  no  account  of 
reserves  or  in  general  of  other  liability  items  which  appear  in  the 
report  made  b}^  the  companies  to  the  State  insurance  officials.  Re- 
serves (items  7,  8  and  9  of  liabilities)  are  held  to  constitute  liabil- 
ities which  must  be  taken  into  account  in  determining  the  amount 
of  earned  surplus.  The  reserve  funds  of  life  insurance  companies 
are  not,  therefore,  to  be  included  in  computing  invested  capital.  In 
addition  to  the  reserve  items,  item  22,  "  dividends  left  with  the 
company  to  accumulate  at  interest,"  wnll  be  excluded  from  earned 
surplus.  The  amount  of  this  item  represents  money  belonging  to 
individuals  left  with  the  company  on  deposit.  Such  deposits  are  in 
no  sense  the  earned  surplus  of  the  company.  They  constitute  bor- 
rowed capital. 

12.  Computation  of  invested  capital. — The  invested  capital  of  life  in- 
surance companies  (both  stock  and  mutual)  comprise  the  following: 

(a)  Ledger  assets  as  shown  in  Item  II  of  page  2  of  the  annual 
statement,  convention  edition,  for  the  taxable  3'ear. 

(&)  Plus:  Any  excess  of  cost  value  of  assets  over  book  value. 
(The  result  will  be  the  total  assets  on  the  basis  of  actual 
cost.) 

(c)  Minus :  Any  excess  of  book  value  of  assets  over  cost  value. 

(The  result  will  be  the  total  assets  on  the  basis  of  actual  cost.) 

(d)  Minus:  Items  7,  8,  9,  22,  31,  and  82  of  liabilities. 

(e)  Minus:  Depreciation  computed  on  the  cost  of  the  buildings 

from  the  date  of  acquirement  to  the  beginning  of  the  tax- 
able year.  (This  ruling  is  applicable  to  all  buildings  owned 
by  the  company  whether  at^qtiiriMl  uikIcm-  foreclosure  of  mort- 
gage or  not. ) 

(/)  Minus :  Propoilionate  part  of  Federal  income  and  profits  taxes 
from  the  date  due  and  payable. 

(g)  Minus:  Percentage  which  the  inadmissible  assets  are  of  the 
total  admissible  and  inadmissible  assets. 


13.  Computation  of  invested  capital  for  prewar  years. — Invested  capi- 
tal for  the  prewar  years  will  be  computed  generally  on  the  same  basis 
as  for  the  taxable  year.  For  1917  the  deduction  from  invested  capital 
on  account  of  inadmissible  assets  will  be  made  in  accordance  with 
Regulations  41  as  they  apply  to  corporations  generally. 

14.  ITncollected  and  deferred  premiums. — Uncollected  and  deferred 
premiums  can  not  reduce  reserves.  The  legal  reserves,  the  net  addi- 
tion to  which  is  deducted  from  gross  income,  can  not  be  reduced  by 
the  net  uncollected  and  deferred  premiums  inasmuch  as  such  pre- 
miums have  not  been  included  as  premium  income.  It  also  logically 
follows  that  the  same  reserves,  upon  which  the  deduction  of  the  net 
addition  is  computed  for  purposes  of  the  income  tax,  should  be  taken 
into  consideration  in  determining  invested  capital  for  excess-profits 
tax  purposes.  The  regulations  covering  the  adjustments  by  way 
of  additions  to,  or  deductions  from,  invested  capital,  applicable  to 
corporations  in  general,  will  be  observed  and  followed  by  insurance 
companies. 

STOCK  FIRE  INSURANCE  COMPANIES. 

15.  Basis  of  return. — Returns  of  stock  fire  insurance  companies  will 
be  rendered  on  an  accrual  basis  for  the  reason  that  such  basis  is  in 
accordance  with  the  method  of  accounting  regularly  employed  by 
such  companies,  and  clearly  reflects  their  income. 

16.  Change  of  basis. — Any  company  whose  basis  is  changed  in  1918 
to  an  accrual  basis  will  be  required,  in  case  the  duplication  or  omis- 
sion of  items  arising  through  such  change  in  basis  results  in  a  ma- 
terial change  in  tax  imposed,  to  readjust  its  return  for  the  year 
1917  in  accordance  with  the  basis  used  in  1918.  If,  in  the  opinion 
of  the  Commissioner,  such  change  of  basis  indicates  that  the  return 
for  the  year  1916  did  not  reflect  the  true  income,  an  amended  return 
for  that  year  will  also  be  required. 

17.  Premium  income. — The  premium  income  of  a  stock  fire  insur- 
ance company'  will  consist  of  the  gross  premiums  written  during 
the  year,  less  reinsurance  and  returned  premiums.  The  result  is 
that  stock  fire  insurance  companies  will  return  as  premium  income 
for  the  year  the  net  premiums  written  as  shown  by  item  7,  page  2, 
of  the  annual  statement,  convention  edition,  rendered  to  the  in- 
surance department.  Ledger  assets,  other  than  premiums  received 
from  other  companies  for  assuming  their  risks,  must  also  be  included 
in  gross  income. 

18.  Deposit  premiums. — Deposit  premiums  on  perpetual  risks  re- 
ceived and  returned  by  fire  insurance  companies  should  be  excluded 
from  income  and  disbursements,  as  no  reserve  will  be  recognized 
covering  the  liability  for  such  deposits.     However,  the  earnings  on 

45277°— 21 2 


10 

such  deposits,  including  such  portion,  if  any,  of  the  deposits  as  are 
not  returned  to  the  policyliolders  upon  cancellation  of  the  policies, 
must  be  included  in  gross  income. 

19.  Investment  income. — The  income  from  investments,  received  or 
accrued  (except  interest  on  obligations  of  the  United  States,  limited 
to  the  extent  provided  by  the  respective  Acts  authorizing  their  issue, 
if  issued  since  September  24,  1917,  and.  interest  on  obligations  of 
any  State,  Territory,  or  political  subdivision  thereof),  must  be  in- 
cluded in  gross  income  after  deducting  amount  paid  for  accrued 
interest  on  bonds  acquired  during  the  year. 

20.  Miscellaneous  income. — Agents'  balances,  previously  charged  off, 
recovered,  and  gross  profit  on  sale  or  other  disposition  of  ledger 
assets,  must  be  included  in  gro.ss  income,  subject  to  the  regulations 
applicable  to  corporations  in  general. 

21.  Increase  in  liabilities  during  the  year  on  account  of  reinsurance 
treaties. — Assets  received  by  one  insurance  company  from  another  as 
security  under  reinsurance  treaties,  will  be  excluded  from  gross  in- 
come, as  no  reserve  will  be  recognized  covering  such  liability. 

22.  Items  not  to  be  included  in  gross  income. — Borrowed  money,  pre- 
mium on  capital  stock  sold,  and  increases  by  adjustment  in  book 
value  of  ledger  assets  will  not  be  included  in  gi'oss  income. 

23.  Policy  payments. — The  policy  payments  of  a  sto.ck  fire  insurance 
company  will  consist  of  the  gross  amount  accrued  for  losses,  less 
salvage  and  reinsurance  received  or  recoverable,  but  will  not  include 
any  estimate  for  losses  incurred  but  not  reported  during  the  tax- 
able year. 

24.  General  expenses  and  taxes. — The  general  expenses  and  taxes  of 
a  stock  fire  insurance  company  will  consist  of  the  amounts  accrued 
during  the  taxable  year  for  such  purposes,  except  that  the  accrued 
taxes  shown  in  item  18,  page  5,  of  the  annual  statement  must  be 
so  segregated  as  to  show  the  amount  of  Federal  income  and  excess 
profits  taxes  included  therein.  The  deductibility  of  any  item  in- 
cluded in  the  foregoing  classification  will  be  governed  by  the  reg- 
ulations applicable  to  corporations  in  general,  except  that  amounts 
expended  for  renewals  and  replacements  of  furniture  and  fixtures 
may  be  deducted  as  an  expense.  Amounts  expended  for  furniture 
and  fixtures  in  the  equipment  of  new  offices  will  be  treated  as  capital 
expenditures  and  are  not  deductible  from  gross  income. 

25.  Net  addition  to  reserve  funds. — The  net  addition  to  reserve  funds 
of  a  stock  fire  insurance  company  Avill  consist  of  the  net  increase  dur- 
ing the  5'ear  in  the  unearned  premium  reserve  as  shown  in  item  10, 
page  5,  of  the  annual  statement,  convention  edition. 

26.  Decrease  in  liabilities  during  the  year  on  account  of  reinsurance 
treaties. — Assets  received  by  an  insurance  company  as  security  under 
reinsurance  treaties,  not  being  income  when  received,  may  not  be  de- 


11 

ducted  from  gross  income  when  returned.  However,  any  interest 
paid  or  accrued  on  such  deposited  funds  may  be  deducted  from  gross 
income. 

27.  Items  not  to  be  included  among  deductions. — Borrowed  money  re-- 
paid,  discount  or  commissions  on  capital  stock  sold,  or  decreases  dur- 
ing the  year  due  to  adjustments  in  book  value  of  securities,  will  not 
be  included  among  deductions  from  gross  income. 

28.  Invested  capital  of  fire  insurance  companies. — The  invested  capital 
of  a  stock  fire  insurance  company  witliin  the  meaning  of  the  statute 
is  the  capital  paid  in  by  the  stockholders,  the  surplus  and  undivided 
profits  of  prior  years  remaining  in  the  business  at  the  close  of  the 
previous  year,  and  the  unearned  premium  reserve,  less  the  defined 
deduction  for  inadmissible  assets  and  such  further  adjustments  as 
are  contemplated  by  the  statute.  The  computation  of  invested  capital 
will  be  based  upon  the  annual  statement  rendered  to  the  insurance 
department  at  the  close  of  the  previous  year. 

Generally  speaking,  the  invested  capital  of  a  stock  fire  insurance 
company  will  comprise  the  following : 

(a)  Gross  assets  at  the  close  of  the  previous  year. 

(b)  Plus:  Excess  of  cost  price  of  real  estate  and  securities  over 

book  value.    (The  result  will  be  the  gross  assets  on  the  basis 
of  actual  cost.) 

(c)  Minus: 

(1)  Excess  of  market  value  of  real  estate  and  securities 

over  book  value. 

(2)  Excess  of  book  value  of  real  estate  and  securities  over 

cost  price.     (The  result  will  be  the  gross  assets  on 
the  basis  of  actual  cost.) 

(d)  Minus:  Amounts   reclaimable  by  the   insured   on    perpetual 

policies. 

(e)  Minus:  Depreciation  computed  on  the  cost  of  the  buildings 

from  the  date  of  acquisition  to  the  beginning  of  the  taxable 
year. 
(/)  Plus  or  minus:  Changes  in  invested  capital  during  the  year, 
as  follows: 
Additions : 

(1)  By  sale  of  capital  stock  for  cash  or  other  assets; 

(2)  By  payment  of  assessments  or  surplus  by  stock- 

holders. 
Deductions : 

(1)  By  payment  of  cash  dividends  out  of  earnings  of 

prior  years,  or  the  first  GO  days  of  the  taxable 
year; 

(2)  By  payment  of  Federal  income  and  profits  taxes. 
(g)  Minus:  Percentage  of  inadmissible  assets   computed   in  ac- 

cordajice  with  section  326(c). 


12 
STOCK  MARINE  INSURANCE  COMPANIES. 

29.  Net  income  and  invested  capital. — The  net  income  and  invBvSted 
capital  of  stock  marine  insurance  companies  will  be  determined  in  the 
same  manner  as  are  the  net  income  and  invested  capital  of  stock  fire 
insurance  companies. 

STOCK  CASUALTY  COMPANIES. 

30.  Basis  of  return. — The  rule  concerning  the  use  of  State  reports 
and  the  requirement  that  returns  be  made  upon  an  accrual  basis 
are  the  same  as  in  the  case  of  stock  fire  insurance  companies.  See 
paragraph  15. 

31.  Readjustment  of  returns. — Any  company  whose  basis  is  changed 
in  1918  to  an  accrual  basis  will  be  required,  in  case  the  duplication 
or  omission  of  items  arising  through  such  change  in  basis  results 
in  a  material  change  in  tax  imposed,  to  readjust  its  return  for  the 
year  1917  in  accordance  with  the  basis  used  in  1918.  If,  in  the 
opinion  of  the  Commissioner,  such  change  of  basis  indicates  that  the 
return  for  the  year  1916  did  not  reflect  the  true  income,  an  amended 
return  for  that  year  also  will  be  required. 

32.  Gross  income. — The  premium  income  of  casualty  or  miscella- 
neous insurance  companies  is  reported  to  the  State  insurance  officials 
on  the  same  basis  as  that  of  fire  insurance  companies;  in  other  words, 
upon  a  written  basis.  The  amount  of  premiums  written,  but  not  re- 
ceived by  the  home  office,  is  reported  somewhat  differently  in  the  case 
of  casualty  companies  than  in  the  case  of  fire  companies.  In  fire  in- 
surance companies  the  amounts  are  reported  as  agents'  balances  and 
in  miscellaneous  companies  they  are  reported  as  premiums  in  the 
course  of  collection.  The  items,  however,  are  of  precisely  the  same 
character.  Written  premium  income  as  shown  in  the  report  to  the 
insurance  commissioner  includes: 

(a)  Gross  j^remiums  written  during  the  year,  including  premiums 
in  the  hands  of  agents  or  uncollected  at  the  end  of  the  year; 

(b)  A  deduction  for  any  premiums  uncollected  at  the  end  of  the 
preceding  year  which  are  not  paid  for  during  the  year. 

As  in  the  case  of  fire  insurance  companies  net  premiums  writ- 
ten, as  shown  in  the  State  reports,  constitute  and  clearly  reflect  the 
accrued  or  earned  premium  income. 

33.  Policy  fees  required  or  represented  by  application.  Item  21. — Policy 
fees  are  sometimes  required  with  the  application  for  insurance. 
Generally  if  the  policy  is  subsequently  not  taken,  the  policy  fee  will 
be  forfeited  and  retained  by  the  agent.  When  disbursed  this  amount 
is  shown  in  item  23  of  disbursements  and  allowed  as  an  expense  of 
doing  ])usiness  in  the  return  of  annual  net  income.  This  item, 
therefore,  is  properly  included  in  gross  income. 


13 

34.  Compensation  for  inspections. — Inspections  constitute  a  service 
rendered  to  the  insured  by  the  company.  Where  such  service  is  com- 
pensated for,  the  compensation  constitutes  income  and  will  be  so 
reported  under  this  item. 

35.  Miscellaneous  income. — Other  items  of  income  will  be  treated  in 
accordance  with  the  regulations  applicable  to  corporations  gen- 
erally. 

36.  Payments  on  policies.  Item  17. — ^Under  this  heading  the  total  of 
item  17,  page  3  of  the  annual  statement,  will  be  deducted.  Since 
the  unpaid  losses  and  claims  are  included  in  the  total  reserves,  the 
net  addition  to  which  is  deducted  from  gross  income,  no  accrued 
losses  will  be  permitted  as  a  deduction  from  gross  income  under 
this  item. 

37.  Addition  to  reserve  funds,  items  20  and  26. — Items  20  and  26  on 
the  liability  page  are  held  to  be  reserve  funds  required  by  law  or 
by  the  insurance  commissioners  of  the  various  States,  pursuant  to 
the  authority  vested  in  them  by  statute.  The  net  addition  to  these 
items  is  therefore  deductible  from  gross  income. 

38.  Net  addition  to  reserve  funds. — The  amount  deductible  as  net  ad- 
dition to  reserve  funds  is  the  excess  of  the  total  reserve  funds  as 
required  by  law  at  the  end  of  the  taxable  year,  over  the  total  of  such 
reserve  funds  at  the  beginning  of  the  year,  regardless  of  the  fact 
that  during  the  year  the  reserve  funds  are  increased  on  account 
of  new  business  and  decreased  wh^n  policies  mature,  lapse,  or  are 
surrendered. 

39.  Health  and  accident  companies. — A  law  requiring  casualty  com- 
panies to  establish  certain  reserves  is  to  be  construed  as  applying  to 
comi^anies  issuing  exclusively  health  and  accident  policies,  unless 
the  terms  of  the  law  are  such  as  to  indicate  they  are  not  to  be 
included  in  that  term,  or  unless  they  are  held  not  to  be  included 
in  that  term  by  the  courts  of  the  jurisdiction  in  which  that  law 
was  enacted. 

40.  Estimated  expenses  of  investigation  and  adjustment  of  unpaid 
claims,  item  21. — This  item  is  not  considered  to  constitute  a  legal  re- 
serve; hence,  the  net  addition  thereto  is  not  deductible  as  net  addi- 
tion to  reserve  funds. 

41.  Invested  capital. — The  invested  capital  of  a  stock  casualty  insur- 
ance company  comprises  the  following: 

(a)  Gross  assets  at  the  close  of  the  preceding  year. 

(h)  Plus:  Excess  of  cost  price  of  real  estate  and  securities  over 

book  value.     (The  result  will  be  the  gross  assets  on  the 

basis  of  actual  cost.) 


14 

(c)  Minus: 

(1)  Excess  of  market  value  of  real  estate  and  securities 

over  book  value  as  indicated  by  items  39  and  40 
on  page  4  of  the  annual  statement,  convention  edi- 
tion ; 

(2)  Excess  of  book  value  of  real  estate  and  securities 

over  cost.  (The  result  will  be  the  gross  assets  on 
the  basis  of  actual  cost.) 

(d)  Minus: 

(1)  Estimated  expenses  of  investigation  and  adjustment 

of  unpaid  claims; 

(2)  Commissions,  brokerage,  and  other  charges  due,  or 

to  become  due,  to  agents  or  brokers; 

(3)  Salaries,  rents,  expense  bills,  etc.,  due  or  accrued; 

(4)  Estimated  amount  hereafter  payable  for  taxes  (ex- 

clusive of  Federal  income  and  profits  taxes)  ; 

(5)  Amounts  due,  or  to  become  due,  for  borrowed  money ; 

(6)  Interest  due  or  accrued ; 

(7)  Returned  premiums  and  reinsurance. 

(e)  Minus:  Depreciation,  computed  on  the  cost  of  buildings  from 

the  date   of  acquisition  to  the  beginning  of  the  taxable 

year. 
(/)  Minus:  Inadmissible    assets    computed    in    accordance    with 

section  326(c). 
{g)  Plus  or  minus:  Changes  in  invested  capital  during  the  year, 

computed  in  accordance  with  the  regulations  applicable  to 

corporations  in  general,  as  follows: 
Additions : 

(1)  By  sale  of  capital  stock  for  cash  or  other  assets; 

(2)  By  payment  of  assessments  or  surplus  by  stock- 

holders. 
Deductions : 

(3)  By  payment  of  cash  dividends  out  of  the  earnings 

of  previous  years,  or  the  first  60  days  of  the 
taxable  year; 

(4)  By  payment  of  Federal  income  and  profits  taxes. 
42.  Computation  of  invested  capital. — In  view  of  the  fact  that  the  va- 
rious State  laws  differ  in  regard  to  the  computation  of  the  unpaid 
claims  reserve  of  stock  casualty  insurance  companies,  the  computa- 
tion of  invested  capital  as  outlined  above  must  be  based  upon  the 
same  annual  statement  upon  which  the  net  addition  to  reserve  funds 
is  computed. 


15 

MUTUAL  INSURANCE  COMPANIES. 
(Other  than  mutual  life  and  mutual  marine  insurance  companies.) 

43.  Mutual  insurance  companies  (other  than  mutual  life  and  mutual 
marine  insurance  companies) . — Mutual  insurance  companies  (other  than 
mutual  life  and  mutual  marine  insurance  companies)  will  be  divided 
into  two  classes : 

(a)  Those  whose  premium  income  >  wii.-i.-ts  of  assessments,  dues 
and  fees,  or  stipulated  cash  premiums ; 

(b)  Those  companies  which  require  their  members  to  make  pre- 
mium deposits  to  provide  for  losses,  expenses,  and  reinsurance 
reserves. 

Companies  coming  within  class  {a)  will  be  treated  in  the  same 
manner  as  stock  fire  and  casualty  companies  except  that  their  returns 
will  be  rendered  on  a  receipts  and  disbursements  basis.  Companies 
coming  within  class  (b)  will  be  treated  in  the  same  manner  as  com- 
panies coming  within  class  (a)  except  that  additional  deductions 
will  be  permitted  on  account  of  premium  deposits  written  within  the 
tax  year  returned  to  policy-holders,  and  that  portion  of  the  premium 
deposits  which  is  retained  at  the  end  of  the  year  for  payment  of  losses, 
expenses,  and  reinsurance  reserves. 

In  determining  the  amount  of  premium  deposits  retained  by  a 
mutual  fire  or  mutual  casualty  insurance  company  falling  within 
classification  (b)  for  the  payment  of  losses  and  expenses  and  reinsur- 
ance reserves,  it  is  to  be  presumed  that  losses  and  expenses  have  been 
paid  out  of  earnings  and  profits,  other  than  premiums,  to  the  extent 
of  such  earnings  and  profits. 

44.  Reciprocal  insurance  exchanges  or  associations. — This  class  of  in- 
surance companies  will  be  subject  to  the  specific  provisions  of  the  law 
as  applied  to  mutual  fire  insurance  companies  and  will  be  classified 
as  are  the  latter  companies  in  accordance  with  the  method  of  doing 
business.  Tlie  returns  of  sucli  exchanges  or  associations  will  be 
rendered  upon  a  receipts  and  disbursements  basis  in  accordance  with 
the  reports  made  to  the  various  State  insurance  departments,  unless 
it  can  be  shown  to  the  satisfaction  of  the  Commissioner  that  the 
accrual  basis  more  clearly  reflects  the  income  and  is  the  method  regu- 
larly employed  in  keeping  the  books  of  account. 

MUTUAL  MARINE  INSURANCE  COMPANIES. 

45.  Special  deductions  allowed  mutual  marine  insurance  companies. — 
Mutual  marine  insurance  companies  should  include  in  gross  income 
the  gross  premiums  written  by  them  less  amounts  paid  for  reinsur- 
ance.   They  may  deduct  from  gross  income  amounts  repaid  to  policy- 


16 

holders  on  account  of  premiums  previously  paid  by  them,  together 
with  the  interest  actually  paid  upon  such  amounts  between  the  date 
of  ascertainment  and  the  date  of  payment  thereof.  The  remainder  of 
the  premiums  form  part,  pf  the  net  income,  except  to  the  extent  that 
they  are  subject  to  the  deductions  allowed  insurance  companies  gen- 
erally and  other  corporations.  Returns  will  be  rendered  on  a  receipts 
and  disbursements  basis  in  accordance  with  the  reports  made  to  the 
various  State  insurance  departments,  unless  it  be  shown  to  the  satis- 
faction of  the  Commissioner  that  the  accrual  basis  more  clearly  re- 
flects the  income  and  is  the  method  regularly  employed  in  keeping 
the  books  of  account. 

CORPORATIONS  ISSUING  COMBINATION  POLICIES. 

46.  Corporations  issuing  combination  policies. — Corporations  which 
issue  combination  policies  of  life,  health,  and  accident  insurance  on 
the  weekly  premium  payment  plan,  continuing  for  life  and  not  sub- 
ject to  cancellation,  may  deduct  from  gross  income  only  such  portion 
of  the  net  addition,  not  required  by  law,  made  within  the  taxable  year 
to  reserve  funds,  as  is  needed  for  the  protection  of  the  holders  of  such 
combination  policies.  In  general  the  net  addition  to  any  fund  espe- 
cially maintained  for  the  protection  of  such  policyholders  may  be 
deducted.  The  determination  by  the  company  of  the  need  for  such 
addition  is  subject  to  review  by  the  Commissioner,  and  the  return  of 
income  should  be  accompanied  with  a  full  explanation  of  the  basis 
upon  which  such  fund,  and  the  additions  to  it,  are  determined.  It 
is  required  that  the  reserves  be  based  upon  certain  standard  and  rec- 
ognized tables  of  experience  covering  disability  benefits  contained  in 
policies  issued  by  this  particular  class  of  companies. 

FOREIGN  INSURANCE  COMPANIES. 

47.  Gross  income. — The  gross  income  of  a  foreign  insurance  company 
or  association  means  its  gross  income  from  sources  within  the  United 
States,  including  the  interest  on  bonds,  notes,  or  other  interest-bear- 
ing obligations  of  residents,  corporate  or  otherwise,  and  dividends 
from  resident  corporations.  The  income  from  business  relating  to 
a  foreign  country  which  is  transacted  by  a  United  States  branch  or 
agency  of  a  foreign  insurance  company  or  association  must  be  re- 
turned as  gross  income.  Foreign  insurance  companies  or  associa- 
tions transacting  business  or  having  an  office  in  both  the  continental 
United  States  and  Porto  Rico  are  not,  however,  subject  to  income 
tax  in  continental  United  States  upon  its  income  derived  from  Porto 
Rico. 

48.  Income  not  subject  to  tax. — Dividends  on  stock  and  inteiest  on 
notes  of  corporations  organized  in  the  United  States  but  doing  no 


17 

business  and  owning  no  property  therein  paid  to  foreign  insurance 
companies  or  associations  are  not  subject  to  tax. 

49.  Income  from  United  States  bonds. — By  virtue  of  section  4  of  the- 
Victory  Liberty  Loan  Act  of  March  3,  1919,  amending  section  3  of 
the  Fourth  Liberty  Bond  Act  of  July  9, 1918,  the  interest  received  on 
and  after  March  3,  1919,  on  bonds,  notes,  and  certificates  of  indebt- 
edness of  the  United  States  and  bonds  of  the  War  Finance  Corpo- 
ration, while  beneficially  owned  by  a  foreign  insurance  company  or 
association  not  engaged  in  business  in  the  United  States,  is  exempt 
from  all  income,  war  profits,  and  excess  profits  taxes. 

50.  Company  having  agent  in  United  States. — A  foreign  insurance 
company  not  licensed  in  the  United  States  but  doing  business  therein 
through  an  agent  is  liable  to  tax. 

51.  Deductions  allowed  foreign  insurance  companies. — Foreign  insur- 
ance companies  are  allowed  the  same  deductions  from  their  gross 
income  arisins:  from  sources  within  the  United  States  as  are  allowed 
domestic  insurance  companies  to  the  extent  that  such  deductions  are 
connected  with  such  gross  income,  with  the  exception  that  the  in- 
terest deductible  is  that  proportion  of  so  much  of  the  entire  interest 
paid  on  the  corporate  indebtedness  as  would  be  deductible  if  paid  by  a 
domestic  insurance  company  which  the  gross  income  from  sources 
within  the  United  States  bears  to  the  total  gross  income,  and  that 
full  deduction  may  be  made  for  taxes  imposed  by  the  L^nited  States 
or  any  of  its  possessions,  or  by  any  State,  Territory,  or  political 
subdivision  thereof,  except  taxes  for  local  benefits  and  income,  war 
profits  and  excess  profits  taxes. 

52.  Rate  of  exchange. — In  applying  a  rate  of  exchange  to  reduce 
the  statement  of  a  foreign  insurance  company  or  association  to  terms 
of  dollars  and  cents  the  current  rate  of  exchange  at  the  end  of  the 
taxable  year  will  be  used. 

53.  Computation  of  tax  of  foreign  insurance  companies. — Sections  327 
and  328  of  the  Revenue  Act  of  1918  provide  for  the  computation  of 
the  excess  profits  tax  in  the  case  of  a  foreign  corporation  based  upon 
the  ratio  between  the  tax  and  net  income  of  representative  corpora- 
tions engaged  in  a  like  or  similar  trade  or  business.  Under  this  Act^ 
therefore,  no  question  is  presented  in  connection  with  such  tax  other 
than  the  proper  determination  of  what  constitute  representative 
corporations  engaged  in  a  like  or  similar  trade  or  business.  For  this 
reason  a  foreign  insurance  company  or  association  rendering  a  return 
of  income  on  Form  1120,  revised,  should  make  no  entry  of  invested 
capital  thereon.  . 

EXEMPTIONS. 

54.  Mutual  insurance  companies  and  like  organizations. — It  is  neces- 
sary to  exemption  that  the  income  of  the  company  be  derived  solely 

45277°— 21 3 


18 

from  assessments,  dues,  and  fees  collected  from  members  for  the  sole 
purpose  of  meetingr  losses  and  expenses.  If  income  is  received  from 
other  sources,  such  as  cash  premiums  or  premium  deposits,  4he  insur- 
ance company  or  association  is  not  exempt,  even  though  its  additional 
income  is  tax  exempt.  Income,  however,  from  sources  other  tlian 
those  specified  does  not  prevent  exemption  where  its  receipt  is  a  mere 
incident  of  the  business  of  the  company.  Thus  the  receipt  of  interest 
upon  a  working  bank  balance,  or  of  the  proceeds  of  the  sale  of  badges, 
office  supplies,  or  equipment,  will  not  defeat  the  exemption.  The 
same  is  true  of  the  receipt  of  interest  upon  Liberty  bonds  where  they 
were  purchased  as  a  patriotic  duty  and  were  afterwards  sold.  AATiere, 
however,  such  bonds  are  bought  as  a  permanent  investment,  the 
receipt  of  the  interest  destroys  the  exemption.  The  receipt  of  what 
is  in  substance  an  entrance  fee.  charged  by  a  mutual  fire  insurance 
company  as  a  condition  of  membership,  does  not  render  the  company 
taxable,  although  this  fee  is  called  a  premium.  A  local  exchange 
or  association  to  insure  the  owners  of  automobiles  against  fire, 
theft,  collision,  puVilic  liability,  and  property  damage  is  exempt, 
since  it  performs  functions  of  the  same  character  as  a  mutual  fire 
insurance  company  and  is  a  like  organization  within  the  meaning 
of  the  statute.  The  phrase  "  of  a  purely  local  character  "  qualifies 
only  "  like  organizations."  An  organization  of  a  "  purely  local 
character "  is  one  whose  business  activities  are  confined  to  a  par- 
ticular community,  place,  or  district  irrespective,  however,  of  political 
subdivisions.  The  word  "  purely  '"  intensifies  and  limits  "  local,"  and 
indicates  a  clear  intention  on  the  part  of  Congress  to  exempt  from 
taxation  only  such  "  like  organizations "  as  are  entirely  and  un- 
qualifiedly "  local "  in  their  operations. 

55.  Mutual  savings  banks. — A  Massachusetts  savings  bank  otherwise 
exempt,  which  establishes  an  insurance  department  under  the  statutes 
of  that  State,  does  not  thereby  become  subject  to  tax  upon  the  income 
received  by  such  department. 

66.  Fraternal  beneficiary  societies. — A  fraternal  beneficiary  society  is 
exempt  from  tax  only  if  operated  under  the  "  lodge  system,"  or  for 
the  exclusive  benefit  of  the  members  of  a  society  so  operating.  "  Op- 
erating under  the  lodge  system "  means  carrying  on  its  activities 
under  a  form  of  organization  that  comprises  local  branches,  chartered 
by  a  parent  organization  and  largely  self-governing,  called  lodges, 
chapters,  or  the  like.  In  order  to  be  exempt  it  is  also  necessary  that 
the  society  have  an  established  system  for  the  payment  to  its  members 
or  their  dependents  of  life,  sick,  accident,  or  other  benefits. 

57.  Insurance  association  incorporated  to  permit  automobile  owners  to 
exchange  contracts  of  insurance  and  indemnity. — An  insurance  associa- 
tion incorporated  for  the  purpose  of  permitting  automobile  owners 


m 

to  exchange  contracts  of  insurance  and  indemnity  without  becoming 
jointly  liable  as  subscribers  on  any  risk,  its  only  source  of  income  be- 
ing from  assessments,  dues,  and  fees  collected  from  members  for  the 
sole  purpose  of  meeting  expenses,  if  its  operations  are  confined  to  a 
single  locality,  is  a  "  like  organization  of  a  purely  local  character  " 
within  the  meaning  of  section  231  of  the  Revenue  Act  of  1918,  and 
is  exempt  from  income  taxes. 

58.  Mutual  health  and  accident  associations. — Mutual  health  and  acci- 
dent associations  are  not  "  like  organizations  "  and,  therefore,  are 
taxable  under  the  Revenue  Act  of  1918. 

59.  Travelers'  associations. — A  travelers'  association  providing  for 
fixed  death  benefits  to  the  beneficiaries  of  the  members  is  held  to  be 
a  mutual  life  association  and  not  a  fraternal  beneficial  society.  Since 
the  law  provides  for  no  exemption  for  mutual  associations  of  this 
character,  they  are  liable  for  returns  and  must  pay  the  tax,  if  any, 
shown  to  be  due. 

60.  Mutual  liability  insurance  company  deriving  its  income  in  part  from 
premiums. — A  mutual  liability  insurance  company  dei'iving  its  in- 
come in  whole  or  in  part  from  premiums  is  not  within  the  class  of 
corporations  specifically  exempted,  and  must  file  a  return  showing  its 
net  income. 

61.  Proof  of  exemption. — In  order  to  establish  its  exemption,  and 
thus  be  relieved  of  the  duty  of  filing  returns  of  income  and  paying 
the  tax,  it  is  necessary  that  every  insurance  company  claiming  ex- 
emption file  with  the  collector  of  the  district  in  which  it  is  located  a 
copy  of  its  charter  and  by-laws  and  an  affidavit  showing  the  char- 
acter of  the  organization,  the  purpose  for  which  it  was  organized, 
the  sources  and  disposition  of  its  income,  whether  or  not  any  of  its 
income  is  credited  to  surplus  or  may  inure  to  the  benefit  of  any  pri- 
vate stockholder  or  individual,  and  in  general  all  facts  relating  to 
its  operations  which  may  affect  its  right  to  exemption.  Upon  receipt 
of  the  affidavit  and  other  papers  by  the  collector,  he  will  inform  the 
company  or  association  whether  or  not  it  is  exempt.  If,  however, 
the  collector  be  in  doubt  as  to  the  taxable  status  of  the  organization, 
he  shall  refer  the  affidavit  and  accompanying  papers  to  the  Commis- 
sioner for  decision.  When  a  company  or  association  has  established 
its  right  to  exemption  it  need  not  thereafter  make  a  return  of  income 
or  any  further  showing  with  respect  to  its  status  under  the  law, 
unless  it  changes  the  character  of  its  organization  or  operations  or 
the  purpose  for  which  it  was  originally  created.  Collectors  shall 
keep  a  list  of  all  exempt  corporations,  and  shall  inquire  from  time 
to  time  into  their  status  and  ascertain  whether  or  not  they  are  observ- 
ing the  conditions  upon  which  the  exemption  is  predicated. 


20 
GENERAL  PROVISIONS. 

62.  Net  addition  to  reserve  funds  of  insurance  companies. — ^Insurance 
companies  may  deduct  from  gross  income  not  only  the  net  addition  to 
reserves  required  by  express  statutory  provisions,  but  also  the  net 
addition  required  by  the  rules  and  regulations  of  State  insurance 
departments  when  promulgated  in  the  exercise  of  an  appropriate 
power  conferred  by  statute ;  but  such  reserves  do  not  include  assets  re- 
quired to  be  held  for  the  ordinary  running  expenses  of  the  business. 
In  the  case  of  assessment  insurance  companies  actual  deposits  of  sums, 
with  State  or  Territory  officers,  pursuant  to  law,  may  be  deducted  as 
additions  to  guaranty  or  reserve  funds.  Only  reserves  peculiar  to  in- 
surance companies  are  to  be  taken  into  consideration  in  computing  the 
net  addition  to  reserve  funds  required  by  law.  Any  insurance  com- 
pany under  the  law  is  permitted  to  make  use  of  the  highest  reserve 
called  for  by  any  State  within  which  business  is  done.  It  is  required, 
however,  that  any  company  using  the  reserve  of  any  State  other  than 
its  home  State  as  of  the  end  of  any  year,  shall  use  the  reserve  required 
by  the  same  State  as  of  the  beginning  of  the  next  succeeding  year  in 
determining  the  deductible  net  addition  to  reserve  funds.  To  illus- 
trate, it  is  not  permissible  to  compute  the  net  addition  to  reserve 
funds  upon  the  requirements  of  Ohio  at  the  end  of  one  year,  and 
of  New  York  as  of  the  beginning  of  the  following  year,  it  being  held 
that  the  reserve  funds  required  by  the  statutes  or  regulations  of  the; 
State  of  Ohio  must  be  used  in  both  cases. 


APPENDIX. 


(21) 


«^gl^ 


LIIT  COWrAWES.  CONVENTION  EDITIOM 


ANNUAL  STATEMENT 


Internal  Revenue  Bureau,  Treasury  Department 

WASHINGTON.  D.  G 
Supplemental  to  Returns  of  Annua!  Net  Income 

For  the  Year  Ending  December  31,  19 


OF  THE  CONDITION  AND  AFFAIRS 
OF  THE 


Cfrgituxd  under  the  Laws  oF  the  State  of . 


Life  Insurance  Company 


as  made  to  the 


INSURANCE  COMMISSIONER  of  the  STATE  OF  , 
pursuant  to  the  laws  thereof. 


liKorporilcd  . 
Hoaic  Office . 


Commenced  Buiif<H> . 


8ecrei>r)r_ 
TfCMuret . 


Vice  Presidenu 


(23) 


24 


ijnrvu  sTATtuiitt  of  na 


L-CAPITAL  STOCK 

I.  AmotmI  o(  capital  paid  up  is-eaah.     .    .       ' 

T    ftmniml  irf  tirtfw  ■■m  faa  fw  bihwt  Tinwrtw  Tl  ^fyriTiiai  |t. 

S.  ,»_„cnaa  ol  akpMV  d»<^  tka  jraar, •..}..<. 

«.  BXTSKMV  *T.     .    .    . -   ...  -^  «...    . 

"  n.— Qccoicr 

■   oriffaMl    peBdat,   vilkoat  daduclMa   for    rnmiaii 
■a,   laaa   (...._ _.ior   ini  yaar'a  rain- 

.  tirrwdw  nioaa  appliad  U  pay  inl  ytft^  ^tmimm$,    ........... 

Teul  fini  yaiar'a  praodwaa  oo  aciflaAl  poBciai.  ' .    s    .    .    ,:    .    . 
i.  DtvMndi  ■fpl»^  l«  parchaaa  pai4-«p  addiiiaM  aad  anauiCM,    .    . 
.  SarrwdwahMa  apftUcd  ■«  p.»ifc...  j.»lLi.|>  «—>.«>.  .^^  ^^^trilH-i    . 

.  Oa»aiJwitiiia  lor  origfaaltaaviuaa  bTotrioc  Ufa  eoattiifMdaa, 

■  CMaidtmioa  lor  aapplmanUfy  «oatract«  iiiTol*iAf  Ufa  i  niiliinmniia. '  .    . 

Total,  saw  fnannmm,    .'....... 

.  K«Ba*al  ptaauimia  Tia  additioa  u>  Mobm  14,  IS,  aad  17),  vilbavt  dadoctioo 


.  Dividtnda  appliacf  Ut  abortca  tlia  andowoMnt  or  pr«niuBi>pajia(  pariod, 

.  Swraadw  valaaa  applied  to  pay  raaaval  pwniii— ,    .    . , 

.  RaMval  prannuM  far  dafarrad  aassiaaa, .. 


.  Kxtrtf  praniuBoa  for  total  and  pannaiMrt  dhabUftf  babifila  ♦ 

for   addittaoal   aaeadantal   daath   baaeSu   $.: Jododad   in   bfa 


10.  Total  praoutua  uteow*.  

31.  '(a)  Oonaadcratioe  for  lupplcamtary  aoatracta  »«C  utTolTiaf  Ufa  e 

7S-  Dividands  Uft  vith  the  tomputf  to  aocomulau  at  intareat, 

'fS.  Ledf^  iwiTi.  otbtr  than  prcmiuma,  received  from  other  iimipairtta  for  eaanTnini: 


■7*.  0km  iaicrei 

3S.  Groea  iatarart  on  coUata^  baaa,  per  Scbadill*  C. 


37.  Groaa  intaree:  on  premium  sotee,  pobcr  kMaa  or  Ueaa. 

19.  Cra«  iatmat  on  depoaita  iB.tmt  oompaBl«a  and  baoks.  par  Sbhadnla  S,  - 
aik  Groaa  l&iaraat  on  other  dabto  di|a  tba  oompABj  ((iva  itaoa  and  aaeonu). 


Sa.  .Crc 
♦3    C« 


eonpaajr'e    proparty,   jnchidiaK   I..—., 
paaey  of  lU  pa*  bqiknoi^  par  SaaJwla  i>, . 


34.  Total  grm  ia»m 

U.  fnm  olM  agurcaa  (ftva  i 


40.  Tnm  afmlar  balaiwaa  pivfio^j  ckar|ad  off. 


'(»)  KoMb,  par  SchadaU  D.    ......... 

(ft  Sk>''kB.  par  Sehadato  D, 

O.  On*  ioerraar.  h)r  idi<HtiMBt,  b  book  raise  of  ladfv  a 

(a)  H«4l  aauu,  pw  Schedule  A,  

at  nooda.    p«   Sa>adata    D  Tmrhfim   *-■ 


/ 


LIFE  llfSOlAKCC  COMPiUrv 


...nioMinacc). 


,  • ^.. 


Amotifit  brought  forvftrd. 
ni-DIS6imSEMENTS 

X^Fvr  dMlV   d&iau   ilcM  I 

AddittoM        

3   *  For  BftUirwl  •odovfaeoU  (hM  I... 

Additioaa  

3.  iM)  For  u>ul  uid  paiTBAorat  dmbilitjr: 

frtoiuiu  vftiTcd  diifiof  ibtyMr I 

rkTmcDt*  m&d*  to  potieTboldm  duria(  tb«  ;«ftr, 
(k)  For  wldiliowl  ftcc;dMt«l  dwth  b«D«£u 

4.  N«t  uno-jnt  p«id  for  toMH  utd  mftturod  iBiIovnaBU 

'$.  Fer  utbttitiw  iavolru^  lif*  rnnliniwiiM >.... 

•.  PNiftiun  not«a  tsd  Lom  void*d  by  U|Mt,  k«.  I » Mitor»t«>M 

'7.  Somadtf  viJaM  p«id  ib  aah  or  tppti^d  ia  Uqw)>tioii  of  louw  or  oot«B  '    . 

5.  Swuadt  vftlow  kppliMl  lo  p*;  ovw  pnouuats  (m«  Incom*  No.  6)    .    :    . 

To  p€f  nMwtl  pramiuiM  (Me  Idcodo  No.  16) 

9.  &uiT«&d«r  TkltMi  AppUisd  to  purcbiM  p>id>up  UMur«ac«  ftad  uuiuitiM  (sm  Ibmb*  No.  9> 

10.  I>iTJdeadi  pud  to  pcUcftoldm  io  cMh,  or  tppUad  in  liqutdatioa  of  lo4fa  or  ooIm     -   .    . 

11.  DiridMdatppbKl  to  pay  rMM«-^  pnmiuBw  <•«  loeoiD*  No.  14) 

12.  Dmd«ada  appbtd  to  ahortaa  iLt  eodovBut  or  praeuum-pftyific  period  (mo  Iocobo  No.  18} 
IS.  Diridoodi  ftppDtd  to  purrbM«  pwd-tip  •ddti40u  «od  uiouitMi  igm  Income  No.  8}        .    . 
14.  PirMiodilah  with  tb«  eoapeay  to  McvauUU  »t  iot«r«»t  <M»lBeaa«No.  33)        ... 

1«.  (Totkl  pM  pdicybofalert,  • 

K.  EspeOM  of  iOT«itiftti«e  »ad  Mttleneot  of  policy  cImoh,  indinfaf  t „«.....  (or  Itfil  oxpeDMii. 

'  17.  Peid  for  cfauffia  od  NppbaiMatery  coatncU  not  iavolriDi  life  r  cimingefn  ii» 
II.  DiTMkod*  mai  interwt  th«eoti  bdd  on  d«poii(  iurreodved  dma§  lb*  yatr 

19.  PkU  itocJ(Lold«r«  for  iatenet  or  dividMuh 

SO.  CoBuuMioQi  lo  efoiitt  Qtm  ooBuaioMoo  oe  numtnac*) : 

Fim  yMr'«  preaiium.  I» . ;  Keoewtl  pr«Biiuiiu,     I 

A&BuJti«  (origiMl),      9..„._ „ ,  dUuwiJ).  I 

'31.  Coflusalod  r«o««ftl  onmniiMinni 

23.  CoMpeaf  tioo  of  mua*gtn  Ukd  eceoU  oot  peitl  by  coEonuMiea  for  eemcea 

.31.  AfMoy  ni|MrTiiioa  ud  ireralinc  wpiMw  of  fupenifDn  (ueept  coatpooMtioa  for  boiae  cSRct  np«r- 

34.  BrMcb  offict  expeoaw,  inchidia(  ul«h«  of  mtatftn  %nd  elwht  aot  iadsdod  in  It«m  22       

U.  If e£c«I  oxuniiun' (oM.  S ...:^_.___ .....ria^pectiooof  rab.t 

3*.  SklftTMi  ftnd  ell  otbor  eoap«Mtion  of  atktn.  dJrocton,  tnttoM,  aitd  Homo  OSco  iMpiVoyeai    .    .    . 
27.  Reot  iMludiact ^areompftay'i  ocrupAOcy  c' iuo«D  buUdinp.  laMi 


r«c«iTed  under  eubUue 


.....»..;  priotiog  tad  lUliooery.  t.. 


..;  po«U(*'  tri«y*pb. 


19.  Laffkl  upefiM  BOt  itidaded  is  lien  16 

90.  Funuture,  fixture*,  end  eefee 

II.  Bepkin  ead  espueee  (crtbar  Ibut  tueet  oa  ro«l  eeUt* 

32.  Tuw  oa  rod  eatMe 

U.  Stuetaaesoo  preBiaiae 

14.  lanriSM  dopvtaeot  Ikmam  end  foM' 
M.  All  otiier  IkeoMi.  fe«.  ud  luee  (fir*  item  ead  eaaeu&ta) : 
M.  F*der«l  oorporfttfaw  t*x  odtm  Ibaa  iaooae  •ad  proitM  tax  . 
t7.  feder*!  iacome  aod  profile  tej(  


M.  (Hbg-  ^iknmmmtM  k 


.  A|WU'  balet.eee  ebufid  off 

.  Borrowed  aooey  repaid  (poM) 

L  lateveet  oa  borrowed  BoMy 

.  Onm  loH  oa  «•!«  or  Motwiiy  of  lodftr  mmU.  rig: 

to)  Red  £«Cau,  pw  Scbedvle  A 

U)  Boodi.  per  Sctwdul*  D '  *   . 


(fit 


«•.  Or««4eaMai^bye4<M«Mat,  inbookvkhM«(WcwMM4l^«it: 


ai  BoMb.  p«  S«b«lule  D  QDdvdi^  I.. 


(f )  Sloeki^  per  Sd)«duU  D 
Tot  u  Dmcmacimn 
Balutcs 


45277°— 21- 


26 


AK5UA1  STATSMtlVT  OF  THI 
lY-LSDOER  ASSETS 

.1.  Dookr^uaiif  rMlMUtoO«aS..>. •rk3tnl««nc«),  par  Sel>.«<l(d*  A   ..    . 

r  Martc>s-lo*raoiir«^«UKP«8tlM4idBB.fin(liMt  I , 

Otixr  tluo  fint  IwM  ■ .      ..■.......•.....-....'    ._„ _» 

3.  Loam  MTurtd  hjr  pMs»  cf  ^•<>ndi' *l<><'k«.  or  oilur  r«UBi<<rAl.  (Mr  Seliwhito  C    .    .    .    .    ,    . 

4.  IxwMCatda  Ui  palticjhMtn  on  thia  eotaputf*  polkjw  ugjpinH  u  colUtercI         

A.  F?«BiuiM  aoim  ou  pobtM  in  1mK%  al  which  V-^ .......ia  for  fir*t  jw'a  pr«MtuiM 

«   Book  nhit  of  boodt,  <_— t       .       ,*.^aad  Up  ill.  » .»:  pw  SiJu 

7.  C«^  in  coapko^'a  oSo«     *->.'•    •'•    •' .*    •    >    >*  *    •'  •    •  ■*    •    •    •'    -9^- 

8.  D«puail«totnuico<DpuiMiBdl)«nbM(aaAttv>M(,ptrS^wJuI«£      .   «        ^—^ *„ 

9.  0«podlU  in  IruMi  nnnpsiitw  tfid  \>nk»  on  ntcrait,  pcir  Scliadul*  E    .    .    .  ■  — ,- 

10.  BiUirtc«i-*bU.».„._.„^_ ,  fe;«ota' iMlftnon  <<Wnt, I u...,CT«Iil.8 


11. 


Total  LcMtB  Ameti^  a»  r*M  iauscc  < 


liON4,SI>GBR  ASSETS 


14.  IfitW«it^«.  (-- 

15.  laUTMl  tloa.  I... 
le.  laumat  dua,  t..'. 
17.  lalwasi  doa^.t... 

It.     

W. 


D  morlcafM.  t^r  Scbadola  B     .  . 
a  boQda,  p«r  Se^duU  D.  Part  1 


..and  aoeruad.  t^ . — 

..jtod  acenad.  t : 


_«a  colUUral  loana,  pw  Sekadi^  C,  Part  1, 
..on  prMnrom  notaC.  poticj  loaaa,  or  liMis. 
..OB  otliflr  aaaaU  (pr*  itasM  aad  amounuV 


mpaar'a  propartf  or  laaa* 


30.  KaaU  dua.  • aad  ac«raad,  t. 

31.  Total  ntTKuar  amo  assm  dcs 

22.  MarkaC  valua  of  raal  aaUU  awr  fooi  uo/m,  py  flcliaiiula  A     .    .    .- 

31.  Martiat  ralua  (imI  iarfWtA;  i*ltrM<  in  Imb  14}  ol  bwMb  and  a(ock«  «*«■  (eol  vo/m,  par  Schadula  D 
34.  I>wlrattot^.•rc<«ln|l*l!liaifo^loaaa•ar  cUiiMonpoUciaaof  thacooOW*  .raiaaorad      .... 


»> 


38.  CroM  drftrrad  praa^a 


npoKciaainfonaDaramtMr'SI,  19 Qaaan 


38.  t>wl.Kt loading   ..    .    .    , 

29.  KH  anouot  of  ancoUactad  and  da/vrad  prMniana 


I  (fiva  Itana  aad  aAauata).. 


Oaoaa  Aaarra 


DEDUCT  ASSETS  MOT  ADBCtTTEO 


St.  Cbapa&j'a  atodc  ovnad.  t 

3Y.  SvppbM,  aUlKMury,  prinud  mattar,  >.— — ..^J.....:  fumit^a.  fixtst*.  and  aafaa.* .  ., -■■■ 

38.  Commutad  cnminiMkia^  3..j> ; — , — .,^..^:  agcola'  dabJt  balaaca^  ^oa.  >_   -  — 

39.  Caabadraaead  loorinltiahaBilaaf  oOMner  aganti 

-40.  U»t»  <Mt  paraxial  aaeurii;,  iodoraad  or  noil,  I ^ _;  UH  racairabUk   I ..y -  — . ■ ! — JL— . 

41.  I^«Biu«  Botaa,  poUejr  toaaa,  and  oihm  poliry  aaala  in  azoaaa  al  aai  raltia  and  at  othar  poficT'  ttaMKliw 

en  iwUvidoal  polUaa  .  ' .    . 

43.  Orardu*  and  accmad  teUraat  on  tH>nda  in  difauk  

43.  Harkat  Talua  of  apaoat  dapoMla  in  axcaaa  of  eorrayaodim  babilkka.  par  Si^adal  Dapodl  Buhrfrt^, 

ptalO      .....................    , 

44.  Book  rahM  ct  ladgar  m^mm  aaita*  valD%  vte: . ; ; 


1 


UTS  niSCRAlICB  COMPAQ  r 


■r: 


lABILmBS,  SURPLUS,  AlfD  OTHER  FUMJS 
■•'^t  p'Moiet  *fthj«  ^  all  lbs  eoVUB^ac  pobci*  in  fore*  on  ib«  3m  6»y  of 


Sum  for  t¥tmwetmFj  tdditioM. 


Smm  tor  n*«ioiiar7  •dfitioai. 


Sum  (or  r»T««iMiftrf  addilNfia. 
ft.  Not  frwrtt  t«1u*  of  HiauibM  darhdiac  iImm  ia  ndoetiMi  of  promiusM'. 
Oiv*  ubl«  ftad  mot  of  istanH.  vii: 


HI 


Ez 


■p«B7  rtinrand  ift  olb«r  ootvaot  compwiiw, 


.;  tnd  for  additioiMl  tccidaniol 


Kkt  Rbbettk 

.  Eitn  iioMTi  lor  IvUl  uid  pwmuool  diMbiliiy  booefiu.  t... 

tlMth  booi^to.  ♦■  .,■■,    .,  indudod  in  Ufa  pobciw, 

.  PraMOt  ««lo«  of  UDOUalo  wl  f«l  (ho  on  otipplMBoaUr?  coairocta  not  inrolTlng  lif*  coatinfOBcioi 

.  Prwyn  nia*  of  wsounu  itwwrod  btil  not  jm  dw*  for  total  and  pemuiMt  duobditj-  bvnifiu.     .      . 
.  UabUitr  oa  pobcHO  caBcoled  and  not  ■•dndoi  b  "Mt  r«wT«"  upoa  vhach  a  wirrMdCT  *aliM  mtf  b« 

dmandod.     . :      •      •      •  y'      •      ■      •.    ■     . 

^  CUia»  for  DMlb  Lmmo  duo  and  oafaid. .     .     .     |t. 

.  CUuMfor  Doolb  U»«'wpn>e«>oladiuolBMtilor»dtnoUd«adaoldu«.    •.......■ 

.  CUi^  for  Death  Lomm  roporiod  for  vfaieh  no  proofa  b«r»  boon  ncm^tA 

^  Raacrro  for^i  Doaih  UoMi  lacanvd  b«t  unrcportod. .  .     .  ' * 

I.  CUum  for  Ifatvrwl  EndownMola  Am  aad  «ap«»d.  

.  Dam  for  DmIK  Umm  and  othor  Rabe;  OaioM  roabtod.  

.  Oftiffw  for  total  aad  pflrtaaaaefc  dioabtbtr  booalito,  t~_ ^ .  aad  for  additioaal  accidMtal 

daoth  t-Mi^u.  t - iadnditnl — — ^~^.  raaiaitd.       .,.'.,. 

I.  Duo  aad  uapaid  oa  Ajuiuity  Claim  iaTatrinf  Ufa  cootinfoocM^      .     ■ 

I,  IfTTAL  PoucT  (XuMa ' 

.  I>uoi^uapaM|onwppl«»aatar7c«ntr«:UfM)<iaro<nnKliforoaUncMcMa. 

!.  Dindaoda  loft  » it.'i  (b«  componr  to  acvumuUu  at  uttwvt.  and  a^cniad  inl4r«t  tharaoe, 

I.  I'TMaiuoM  paid  tn  adt-aace.  iuclodiof  flurrondar  valoaa  ao  oppbrd,   ■ .... 

I.  t'aoariMd  iBUraat  and  raal  pud  in  adraaca,   .     .  .     ^ 

\.  CoBOtMitriiiB  dua  to  ac«ita  on  prrouaai  aot«  vhaa  paid.  

L  ComouMioaB  to  a(«ata.  duo  or  accruod. 

'.  "Civlff  toUMtion"onuac«llocl«l  aad  drf«rT«d  praAiuoM,  teouaMof  lli»loadi»t  thaTocn 

t   SalartM  roou.  oOWo  npMoa.  UUo  and  acconnU  dua  or  acoitod,         .     ^ 

}.  lUdkcal  nvax*ven  faM.  t .  aod  l«(al  faaa,  I. ,  du»or  acuvad 

>    FMimatf^  «Dfi«nl  h«ra«ftar  pajrabia  for  FadaraJ.  .Stato.  and  other  U\aa  baaad  Bp«n>th«  bninaaa  of  |bo  J*u  of  iha  alala— t 
I    Advaafaa  by  offwaracvotJuriooaccouotof  atponaaaof  orfa/uiaiwaor  ctharviaa.  

\.  I'npaM  diTidaoda  t^alacia*oldar«. 

I.  lh\  K(«««<b  0*  otbar  profili  duo  policrhMdara.  inf  ludmf  thooo  continfwtt  on  pafDMrn  of  ovWaaditic and  dafarrod  rraAiaaa 
\  Pr  Kbnda  daitarad  on  ar  apporitoood  to  «t«waf  d.<^">d  pobnaa  par*^*  to  pobrrfaoMara  to  aad  Inrtoding  (aoalk)  ^ 

((t4«) „ 19 ..^  wfwtJtv  rontifl(«nt  upon  iba  papnoM  of  rma«^  praaiusM  or  iilliiiwiaa, 

\    I>indmdBdBitand«aorapportiMi*dt«df/«wvdd>tidmdpothMapaf*bloto  pobcrboldora  lo  and  mcludiMf  (•oath)     „ 

<day) -  «-.._ .■     ■     ■ 

7.  Amoanla  aal  apart.  apportMHwd.  pnmaionaOf  wcrrtaiiwd.  cakutotad.  darUrad.  or  hald  aaraitutf  apportioQAont  apon  i*fwmi 

4,v^t^  pobrtaa  not  iBchid«l  in  Iloa  3«.    .     .     .     ■ 

I   Rm«v*.  apoc  hI,  or  furplaa  fandl  DOI  Inchidtd  abevo  (fiTa  lUma  and  aaiovnU  aaparatdr.  and  «al«  for  what  purpoao  aacb  of  taid 


28 


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Kinmd.  nirtrntnt  orrwa 

SCHXDULBK 
SUeuini  aO  Etptruliturcs  in  ConnteUon  uith  .VatUrl  Btfon  Utitladm  BodUt,  OffUert,  or  Departm^nti  of  Gottmment  Duriixf  IS- 

,.r.. 

IffiT 

KSSaSi 

aSSSS!T!L!"ni:um 

•u,t 

U»RM* 

J^       .__ 

t 

STOCK.  FIIIE.  AND  MAKINE  COMPAWlgS-COMVENTION  EPITIOW 


ANNUAL  STATEMENT 


Internal  Revenue  Bureau,  Treasury  Department 

WASHINGTON.  D.  C.       * 
Supplemetltal  to  Returns  of  Annual  Net  Income. 

For  the  Year  Ending  December  31,  19 


OF  THE  CONDITION  AND  AFFAIRS 
OF  THE 


Insurance  Company 


Organized  -under  the  Laws  of  the  State  of , as  made  to  the 

INSURANCE  COMMISSIONER  of  the  STATE  OF . 

pursuant.to  the  laws  thereof.  . 

Incorporated     ____—_—____-._— rnmmrnrrf4  Rii<tn^«  _  ,  ■     ■,  ■ 

Home  Office  .— . , . .—.«>•  ■  — ,  , .,1.1  ,„ 


President 

Secrcuiy  , .,-, Vice  Prcsidcnft 


Treasurer  . 


(33) 


34 


UrWAL  gTATTMirr  Of  THl 
I -CAPITAL  STOCK 


t.  AMwlWeara^p^ap 

S.  „  ...cwMi  of  p«U-ap  «*plul  dttriac  iW  7«ar    ...:..•.. 


CDMlaet: 


T.  ToUl  tut  pHintuM  writtm  (oUmt  Umi  p«rfwta>I>  .  . 
B.  DcpoMt  pnatiQDtt  writun  oa  p«rpetaal  ^\m  (gnm)  .  .. 
•.  <kmm  bl«nat  tax  moKcifw  lowu,  f«r  Selwdul*  B,  !«•  I_ 

mortgKfM  MqwrMl  duha(  1 9 

la  Gron  inumt  o«  eoUaUral  loMM,  ptr  fV^tiTiJt  0     ... 
JI.  GroM  inUTMt  oa  bwtds  ftod  diTidawb  on  ctoela  Wlu. 
bood*  ae^uind  duriac  "*     ,-i  par  ^^-^lT  D     ,    . 


'\i.  GroM  iaunrt  w  <l«p(MitB  ia  tnat  oompapwi  and  baate,  p«  A^adala  V    ,'. 
13.  Qroa  iBl«n«t  (ram  all  ecbv  Munai  ((iva  ifaaa'aad  a^MSta): 


Jt.  Oroaa  note  fraa  eaeapaaT'a  prtparty,  indudlng  l» 

lb  awn  binl^tisft,  Um  $— . i_. 

tT'  Total  urmMtet  un  KSfn 

4a.>nm  olfav  •oureai  (flva  it«M  tad  aBouta] 


St.  Ineraatt  ia  liaMlitiw  dvriag  Um  yaar  oa  weooat  td  Vtnrim  Inalii 

n*.  R«Bituami  (h»  Hooa  OOm  Io  IMted  S(al«  Br^eb  (pwO 

U.  From  ■cnto'  baUacw  pmiegrfy  ahMfad if    *.  <   *    • 

t6.  Borrowed  tBoarj  igram)%       ..   , 

91  OroM  pratftooMl«oraataritr  of  U>l|wa«*la,*tK: 

(a)  K«al  aiUU,  |Mt  SchaduU  A    .         

ft)  BoMb,  POT  SoMakD 

W  8«ocka.  ptf  Sc^adob  D  '    ,    .  - 

v.  Qnmmenam 


a)  Boo^,  par  Scbadola  D 
U)  Stock*.  p«  Sch«Ua  D- 
TMal  Imom     ,, .. 


AjBounl  earriad  forward, 


±±L 


35 


ui&uiuiicx  coMPAirr 


As>cun(  brou(^.t  forvtid, 


DISBURSEMSirTS 


1.  limm    1 1  rill  MMnutM  ftii  fiHt^nUm.  hm  fc  a^^.  fa  ay. 

.  fftJiitfal  nn  ■ ICsriM  ud  i«faw  «.„. 

■■■II MC  fa  prgrfa—  ywij 

«.•    .  ««hnff* t : . 


•_ 


4.imthtmmvM 

%.  Vrnt  m^mtmm/L  tatfmmt  ^    . 


Total  <•  «&d  7  eoljj   ,.    .^  .-....-...    . 

to;  Sklan*  af  Ud  s>«a ,;«....-.. 

(r)  Ex v«ttT»— T^wvafinc  mpi—M  «f  o«liin  tUa IiM  b«    . 

Total  Fiela  Sam«MO«T  Exv«m«s 

K  BAaim  ud  Fmi  -DtrwUif*.  oftc«n  ud  cUrfa  ....... 


II.  lUp^  facMiiic  LoiumfaM  . . 

U.  IiMf«clioai  ud  Mim9«,  iirhifli^  tM««Til«*'  Bmt^  Md  Tififf  A«^ 


!«.  r«d«nl  ux«  »_ 


a) 


IncMM  utd  proSl*  tei  t_ 


I  -< : 


k)  FW  D.f»»ftiBMt ^  . « 

(A  IV*  Pklral  ud  S«t-r»c*  Ccrp« 

IT.  Utd  •■rtf.M.  wdiijac  *^  M>M—  —  h—     : 

If.  Affal*'  b«lMc«  cbirsad  off  ,  /    .    .    .- 


Ila).. 


■»•.  »»iimt«i  »  Hit  OteK  by  D«il«J  8uM»  Hri»|>  <pl>  .y^.V  t<»».  -V  « 
'S.  K«a «te«» Willi. ■ 


-riock,! 


Jt.  DiuwtilBa4Mjliaa>runll)«yw«i«>aoowl«riBBimi»MHM'     .    .. 


a>  Bad^iivSelwiabD   . 
b)  aMlia.|i«SchaM«0  .    . 


tl.OKmt,atm.h,yli' 

U)  BMdh  pv  Sdudab  D 


36 


unnu.  VTATSMSHT  or  Tin 


rV— LBOOKR  AS8ST8 

■J,  {Mr  8«li«)nl«  A 


J.  Doek  rahi*  r4  rMl  «UU  ^«i  t., 

«.  llw%K|*lMiHOorMl«UU,p«Sdwd«l«B,  Ink !-'.«%  I ^ 


4.  BooknlMoTlMD^I , .Mdatock*.! ,-pirflA«<iUD    (_ 

B.  CM  k  «oa|Miv1t  oOm ^.  ......    .    I 

4  DHJ0ihitateiMtwp*niiM>db*nk»notOBiaUrwt.p<t8A«diiUN    .    ■ 

7.  Pipom  la  traat  coapASMi  aad  lunk*  oa  tntwtvt.  p«r  Seh«did*  N    .    .    ^,^,^,„,^^,^^^^,^^^^^^ 

t.  A<MU'b«Uac«r«fir«Mrntio|bu^MMwriU«n«ibw(|tMD(toOctob«l,lf • 

'  f.  Ag«U' b«bncM  TvpnMQUnf  buaiiMiB  wriUMt  prior  .Ip  Oct^v  1. 19 .f 

10.  BOb  nc«iv»l>U.  uk«n  for  bmtum  ud  iaUnd  ririu     ,,.... 

11.  BUb  raerfrafaU,  uk«B  for  fin  iteM » '  .     .    .    .    ^    .    .    , 

II,  OtW  Udfw  hmU.  vu: -,     ,   ,  ■     •  . ^.— ,. ^ 


Total  1«bosb  Awcn,  u  m  Bauxob  ok  Faob  S 


17.  lDl«»t  d««,  *  ,  "^  •etruA,  l^ 

U.  InUrMt  d«o.  t uid  Mcnivd,  $~ 

M.  Int«r«t  dao.  t A...kod  icenMd,  t-> 

ab.  iDtorwt  dii*.  $ - JUkd  McrtMd,  1- 


KOK-LBDOBR  ASSETS 

I....... OB  mortftgw,  p«r  Sch«<lti]*  B  .    .    .    . 

..m  bon*,  pmr  8ch«dii]«  D,  pwt  1       .    . 

„. ea  colUfartl  Ioum,  p«r  8ch«duU  C.  pwt  I 

■-— an  oth«  HMt«  (fiv*  ii«M  ftad  aaounto) 


iecmfmaj^pnpmtjvrlum 


.  MwkMTjMorndMUUmrloo^Mhtf,  p«rScifc«MtA     .    .    . 

.  M«ri(«t  valu*(MriM<Mtii;ial(rr«(lnit«ai  IS)of  boDdtutdftlocb* 
.  OtW  MnUJnt  Miiti.  to: ! . , 


pkcfrMfwc,  p«r  Sc^«dak  I> 


SI.  Computj"*  Mock  vwxt&A,  l„ 


DEDUCT  ASSETS  NOT  ADIOTTID 


S3.  8uppti«M,  pnnlcd  m»U«r  mmI  vUlloMry  .' ..' 

53.  VWniw*,  fatvw  uidMfn 

54.  AfMito'  bftlinoM,  i»prettnUng  bMinwi  wrilUo  prior  to  Oetobw  I,  1>— 

55.  Btib  rvcolrabU,  pMt  dot.  Ukao  for  marine,  nUnd  sad  fir*  ririo 

S5».  E«c—  ol  bflto  Ttc<«y»blt,  rwtt  part  dxia.  ulwo  for  fiw  riritt  gwr  tiw  iwitwd  prftow  th»aon    . 

39.  Lo&M  on  p<rw>iwl  Mourit^.  iikdorMd  or  not 

91.  OradtM  wid  aecnod  intarwt  oa  boodi  ia  dt^Mlt 

S«.  MarkM  ▼■loa  of  ■poebl  a<po«U  ia  ««»  of f  iinr«H  BabiBliWi,  f  iftfriil  diya^H  ■ohaJiiU 

p«e«»o • 

39.  Book  ▼»]«•  of  rati  ••Ut«*T«mwk«(  vain* 

40.  Book  niu*  of  boodr  »nd  atocka  war  markal  rahw    .     .    . 

41.  Book  vahM  of  otlkar  ladgar  aaaata  ovar  turkal  valaa^  *ii:  ,  ,.,... .  , 

43.  ToTAS.  Amanwo  JLMon 


37 


msosANCE  coMPAirr 


V-LIABIUTIES. 


(■)  Dw        .    , 


3.  Onw  Aaimt  for  Wmm*  in  prooew  of  kd/vttnra't  or  ia  rnqMOM  (plm 

of  •UtcnsDt,  of  vtucb  t>o  no< 
A.  OroM  fllaiai  (or  kMM  r«bt«l 

4.  Tofu. .•    •    . 

t.  ZMnet  niammoes  m  pM  Sclte<hilc  E.  oolomm  (2)  aad  (4)  . , 

A,  Nol  unouat  of  ospoid  Iomno  tad  cUimg •<< 

7.  Oraa  prMmuini  Om>  r«!aMimicc)  rwwrod  utd  rweirklil*  upoa  ftU  unaspind jlrv  rUn;  ♦  ,  . 

wnumtil  pmaium  por  rteopilotottoo  p^C"  ''i  oohum  6t         .    .    .    .    r 

i.  OroM  ynniiuw  0««  niimtfBBM)  (atih  mhA  bilb)  rocairvd  u>d  roeaiTtbla  upoo  »I1  tuwxpind  inlowrf 
t,  !....„ ;  onrarttcd  preniiuiM  QC/ty  per  c«at)t     ........ 


0.  Orow  protajama  (iMi'rMwurvtco)  (caob  uid  bilk)  raotiTad  ta^  r«c«iT«bt«  upob  kU  voexpired  nari*c 
fkb,  t.^ ;  uAMnod  prmhuM  t- — .-™ por  ototlt 

10.  TfrUttuMamad  prooiiumiMeoiiipaUd  ftboT*  < 

11.  AmountrT«Uimabl«b7tiwil»ur*doop<rp«tua]firoiB«ilWH>polidt»,  bciiig perotntof  IheprwAiumordafraoitroMired. 

U.  Mot  prcminn  nmrrt  utd  aB  oihtt  UtbiEtHi,  »xc«pc  e«pk«l,  obdar  Uw  bfe  inraruto*  or  ujr  olW  •pedd  depwtmeni 
13.  DnB—d  bclucM  of  biOi  Mid  ooIm  todedod  ia  tdndtUd  wsota,  Uk«t  in  odrmaeo  of  prwarfum  oa  op«o  moriiw  4Qd  inland 
polteiM  or  otbarwb*,  r*taro*Ua  ob  MUWrneal,  not  iodtidod  in  iutm  9  utd  9  *bovo        ,    . 

.14.  Mactpd  uDpold  oq  acrip  or  ocrtifieoU  or  profit!  «vUiorised  or  ord«rtd  to  b«  rodMoed       

1$.  Zktarat  duo  or  OMfocd,  iacbdiay  I — ._» oo  barrowod  moiM7        

16.  DiTideods  dcdtfod  uid  onpftid  to  tloekk>ldM9,  l._^_ — _,  to  policy  holdon,  f     .  -  / 


17.  Sklftriw,  r«aU,  fxponoeo,  bilb,  Moountc,  foot,  otc,  dtM  or  oceniod 


Ite.  8bo«  omouat  lMr«ftft«r  pojoblo  for  Foiir>l  isoooM  Uxi 
19.  CbBtincMl  fomrnUdftii*  or  otlMf  okvgM  dso  <»  Mwwd 
JO.  FtB^  Wd uiukr  rwanruMo  UwUm     .    .......    . 

31,  Dim  »ad  to  booomo  do*  Cor  bornmd  wOaty  '.    .    •    , 

33.  All  olb«r  UkbditiM,  via:  .^, : ,..—  .. ^~^ 


I  ti  iW  ytat  of  thio  fUl*. 
I  Mpwtto  from  aQ  otlur  Ioxm  (Suto  tad  otW) 


I   I 


M.'^  '      1     T»r«i.  Amotivt  or  Ui.  LuMunu  K^OBiT  CuTTu. 

96.  OkriUl  pdd  up 

n.  ainpha«nriDJ.Uili« 

M.  I«l>ha  i«  npiA  P<'i<rk<'<'." 


Toro. 


f  l.iiilnt.Mi«iii«»k. ■■>«.<.. w  AM" 


jf.a«>-«iift<i'akiMiW«*  i 


38 


llJ 


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I 


1^ 


1' 


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39 


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i 

1 

1 

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u 

AHKDAL  STATZMtirr  Of  THl 

SCBEDUL5  K 
SItowini  all  Expenditure)  in  Connection  with  Matltrt  Before  LtCMaUie  Bodlei,  OtfiMTt,  or  Departments  of  Coijmmcn:  Durin(  19 

r.r.. 

"vsr 

'rUS'.£,:s 

IvTtBor  cr  Ti.r 

NUU 

ADS»U« 

Oatr^iftkTMN  TMKUIM 

Torat. 

1 

I 


MISCELLANEOUS  STOCK  OOMPANIES-CONVENTION  EDftlOW 


ANNUAL  STATEMENT 

TO  THE 

Internal  Revenue  Bureau,  Treasury  Department 

WASHINGTON.  D.  C 
Supplemental  to  Returns  of  Annual  Net  Income 

For  the  Year  Ending  December  31,  19 


OF  THE  CONDITION  AND  AFFAIRS 
OF  THE 


Organized  under  the  Laws  of  the  State  of as  made  to  the 

INSURANCE  COMMISSIONER  of  the  STATE  OF 

pursuant  to  the  laws  thereof. 


Incorporitcd Commenced  Busineu . 

Home  Office  —.——. . . 


Pretident. 


»~-'""r  Vice  Preiideno 

Treuurct ■     ,.-    , 

(43) 


44 


Z  A»o«U  of  MftU)  pMl  up  in  CMh,    ..... 
9.  AWB— 1  af  lrd|*r  aMTti  (m  fMt  Ul«ac«\  l>MMiWr  3 
S.  «k,„^_.crMM  cf  pBMl>up  ctpiUl  durvkf  tbe  ycvr,     . 
X>nJiM»  *T    .      . 


AHUOaL  STATtMEHT  OF  TH£ 

1-CAPITAL  STOCK 
•-.. 


:.  GroM  inl«r«al  oo  d^o«ito  m  tmst  eoaLp«atOT  wkI  b«ali«,  par  SdMduJ*  N, 
.  Ckm  iDtcr«M  trom  tU  et^  aowcM  (pn  iUnatad  •mouato); 


^. . — for  coaipAajr'*  eceupwey  erf  ii 


Total  Gbom  IimittaT  akv  Kmtm, 
.  Tnm  elkw  bovcm  ^*fl  iuna  ud  waotiAta): 


94.  FkWB  AfMtU*  b«Uikew  prvrioutly  cLufwl  off,  

97.  B«nv«*d  BioMy  (fnM)| ^  ....■«..  « 

jW.  GfM*  F'o't^  OA  **)*  <>'  nuttunly  of  Iwdgn  hwIv,  «il: 

fa)  R«*l  S»Ul«,  |wr  Schedult  A,     .     .    .    ..'.     ,     4    <■.,.     ^    ........     .      «^ 

O)  Bcrnb.  per  Scbfduk  D,   .  -.     .     .     .     .     .     .     ...     .     .     .     .'  .     .-  .    \     .    .' 

(e)  Stock*.  p«r  Scbadul*  D,        ......     .*..  .   '. ..'".... 

9^'.  OfMi  ntmm  hj  AdjutoMnt  is  be«k  ^»Xa»M  Udfar  ■■■(!,  m- 

(a)  Bm1E«UU,  pti-Sdwdst*  A,     .....,.' | 

O)  B«o^  p«  Sd»«luW  D.   .. ,.     .   

U)  Sleefa.  p»  9«b«dBl*  D,  .    .. .     .     .  ,^ 

'40.  Total  Imxai*,- " 


tW)  tifiiBw  a»  ta  «fTMj  « IMMU  U  d«9vWMt  f»fwi 


45 


AiDOuat  brrifhl  1orwv4. 


m-DISBURSKiaNTS 


4-  W  Oft—a  a  tomfamHan, . 

i.  ru«iii7, ' 

«   Suntt 

7.  puu(iM«,     .....: 

1.  SiMm  boOw,  >    .    !    .    . 
9.  BurcUrj  ftnd  lUft,  .    .     . 

10  Cwdit.     .    .    .'..•".    . 

1 1  Sprinkler,  " •  , 

12  Till* 

13  FlrvliMl,  .     .     . 


.  Worknvn  ft  coUfcti's,   . 

,  U'»  tUxk 

TOTAU,         .       .      . 

Acad«nC.  t..„ 


~'tSi'— 

..«■<, 

— 

-JBTJriS-' 

•>— . 

J 

'' 

■ 

_ _ 

;  LMbifilJ, 

PUUlU^ 

;  SphaUa, 


•  for  t^  foUowi^  rliim- 


;T.U4. 

;  livvfllodi. 


».  .._ ,  HnlO, 

I _ :S<«««r. 

S ,Cl«bl. 

n>vb«l.  I """  " 

Pubcy  fm  rctaulid  by  IfcnU 

.  CoraounioM  tr  brckrrif «,  leti  anouat  rtc«*td 

ArtidMiI,  I — ;  RMltk, 

FMlcdly.  •-.._ -.;  Sunir, 

-  2:rtt;^       r.™ ,...c^u 

SftlarwM.  f»M,  and  all  olber  tompe&Miioa  of  ofl^n.  dir«elei>,  truitM*.  and  boo*  ofie*  mphftm, 
liliiin  liiviliiii,.  mil  ill  nthir  iipirwii  nf  if  Mite  nnl  piirt  hf  nnminiMinni.       \    ,     ...     .     . 

.  )lf4*r«l  cxABuncra'  ffo  uid  mIww*. *....... 

.  'n*p*ttioB»  (oUter  than  m«iLr«l  tod  claim), 

.  Rrni*,  inclading  I .' for  coaipaa;'*  ocmpkoe/  of  >t*  riwti  knJ.-l^ra    ... 

.  Rrptin  ami  txprmM  (oikct  ihas  tasa)  M  rati  taUU.    .     .     ■ 

,  SlaU  luua  on  frnmiuBW,' ^     .''..•..:.■■,.      . 

.  laaurtsea  Dff|MrliB«Bt  bwMW  asd  faat 

.  AH  other  bccuMa.  ffcs,  ud  tun*  (fivt  itoaa  utd  aawuaU)- 

,  Ffttntl  corporttwB  laa  othw  Oiui  iaeoOM  and  protta  tax      .-i  ..**.■*.... 

.  Tw4t*i  iaroia*  ksd  profiu  tai..— »...».. — .--..p^— ..,, ,,^  "..■■— —■■■■m  , 


,  PriattBc  aad  •latiaatry 

.  fttttMf*.  lrWfr»ph.  Uimfhont.  aad  anpNM 

.  f\mutgrt  aad  6>lar«, 

.  StachhokWv  k>r  lAtvrat  or  dind* &di  (uMuat  d«clar«d  dtfWf  tha  ]>«ar,  I... 

.  Cth*r  dtfb«fMn«eu  (fi**  iua*  lad  Aaottati): 


„>&: 


.  AftBis'  lifchaiM  tWgad  aff, 
.  Bormrtd  B0M7  rtpaid  (fnaa), 


.il 


46 


unmn  sTATiMraT  or  tbb 


IV-LEDOBK  ASSBT8 

1.  Book  Ttluo  of  nti  foUU  Om  t— ■ *  <o««ahi«nM»>  pn  Sdwduk  A,   .     .     . 

S.  Unntte  lout  on  rnj  |•UI^  fa  Sdwdok  B,  AM  liaat, .•    (. 

OUmt  Uwn  fint, — ~ 

«Me««4  by  pUdgo  ol'boorli,  olodoi.  or  othw  colUlAvb,  par  Sebodolt  C,    .     .     .     . 
nlM<<  boado,  i i  •ajilocb.l..^ ,  ptr 
I- 


t  MKBIttniMi  tiu)  bftnks  act  on  toUrMt,  pw  SdiMlnl*  N 
T.  Depoaita  u  tnnt  oompuu«B  «nd  iMnka  oa  inUroil,  p«r  SchwIuU  N,  . 
8,  PlroniuBM  ta  ooon*  of  coUtoUoa,  *is: 


•.  AccidMil. 

10.  Hctltk, 

11.  U»t>ililr, 

11.  WorkiiMD'*  eoRipATiMUoa, 
IS.  FttUlitr, 
U.  Surety, 
15.  Flktailua, 
le.  St«*m  botl«r, 
17.  Bur|lu7  ud  theft, 
IS.  Ordit, «     •     • 

19.  SprioUar, 

20.  TiUtf . 

ai.  Flyvlml 

32.  Automobila  aad  inam  ^npm*f  daattf*, 

33.  Workmsa'a  eoDvctin 

34.  tiTt  ■toek 


36.  ToTAi^      ..........     I  — _... 

36.  BUk  ractinbU 

37.  OlbwUdfftraiwU,  vi>: 


.  4*  m  Baumci  < 


52.  lDl«Tnt4«e,  t..^. 

53.  rjtt«r«tdw,  « 

U.  IntmM  dw,  I ». 

S5.  Interwt  dw,  •„. 


.  ^  ■ecniod,  I . 

.  ud  ucnMd,9 » 

.  and  •ccnwd,  S 


....•„  ud  tcenMd,  t..n 


MON-LBDOBH  ASSETS 

oa  mortgmgts,  per  dciwdul*  D,    .     .     , 

^...  oa  booda,  p«r  Schedule  D,  pvt  I,    .     . 

OD  cdUtffal  Jo«D>,  per  Schedule  C,p«rtl 

an  other  aaMie  (gire  items  tad  unouQU), 


38.  Reate  d««,  • . „ tad  McnMd,  I ~-. 

S9.  Uuket  TttiM  <4  red  mUU  otv  book  Vklue.  p«  St^edtde  A. 

40.  Umrket  Tkhie  <not  Jadudin;  iatercst  ia  Item  33)  of  booda  and  • 

41.  Other  aoaMgw  ^Mla,  rii.: 


«■  conpaaT'i  propvly  or  keee,     .     . 
■eht  vnt  book  rahie,  per  Schedule  V, 


D*dact  A&MtB  Not  Admitted 

45.  Conpaaj't  etock  owned,  f . .._ ;  bwae  en  %. — t . 

*.  BiSe  re««T»Ue 

47.  F^raHim  end  Axturce, .. 

4S.  Sopplice,  printed  Butter,  end  etaiiocMry, 

49.  Loeae  on  pewcaal  eeeurity,  indoiied  or  aot, 

50.  FreniaaM  in  eoMM  of  eoDeetioa  etfeotire  prior  to  Otober  I,  19 

51.  Orwdae  end  aeened  tatenst  ea  bond*  ia  d^adlt, „_ 

62.  Mtfket  Telue-of  epeeiel  depoeiU  in  exccee  of  correqMndinf  lUbtUtiM,  per  SpeeJal  Deposit  fldwdide,  pefe  10,     ..» 

63.  Book  raloe  «4  reel  mt*U  arm  aurket  velue, t „ 

64.  Book  reloe  at  boede  sad  etocke  orer  oiarkct  relae, 
K.  Book  Teloe  of  other  Udger  enete  vfw  Barket  nine. 


i 


47 


V-LIABIUTIES 


I.  Lo»M  nd  cktn 


3.  H- 


IftllT. 


• 


0.  Sonty 

9.  Pl*u  (Um, 

9.  SUUB  boOcr.    ■    .    . 

&  BarflaiT  aad  tlufl, 

10.  SprinU«.     .... 

41.  T\H9.  ...... 

1.2.  FlrwbMJ. 

14.  WorksMB'a  coUrctirv, 

15.  U'C  rtock, 

le  TvTAu, 

17.  Spvcid  nmtrr*  for  uBpAtd  b*b(liiT  tad  workmeBi  eompctualtoo  low S...~ «.„... .„..^„...-. 

|fl.  Spceifll  fMsrv*  f  .r  credit  lotMi  oa  pcdidM  upifiag  in  Octotar.  Norenbtr,  and  Dictmber.  I9...»^  bitli|//ty 

pw  cast  of  I gnm  pf*«ni>i»ii  wewTcd  *«  mid  pottcJM.  I—  l^.„.^..l „.„.„.....„ 

■    patj  Jwrun  »id  BiMftth»  on  Ihmw  nitdw  tMrf  poboM,     ....,..,.. .„.....„..„»«....„.. 

19.  Sptcul  ttmrrt  lot  •umed  luwiy  oa  crodil  poLcic*  ia  fore*  Dccenber  31,  19 ,  ^magjiftf  per  nnl  of 

I ,  M.rv«d  prtmiunw  oo  wid  polKi«i, ,.-.,. -nn----rBMn«-iMf^- 

)0.  Total  ntr^iD  cuuitt, *    .    .,  , 

31.  EaUmslod  npntMt  c(  uirt«ii(ation  aad  ■djiNlBicnl  of  uopaid  cUiov 

22       Acodatt,         I „ Health.  I - Fid^lj,  »... .^ ;  SyMjr,     |.„„™ „.; 

33  PUlaflMO.      I  ....,  SuanboilM,    I .^ Puijlary  wmI  tLcfl,     I .„-„—;  Ondtt.-    •.«.._.._— ; 

34  Sfrii.U«r.        t ;  "HUo,  I ;  Fljrwied,  '  1 -- :  *;V^^    » ; 

33.  Viitea'ii^iM.   I -.  LiTealoek.       t - ... t ^ t«i«™.  »«.«.«^......; 

3d.  Total  i-!<ea«mbp  rftcmtiis  a«  anowii  bt  ucAmvLATioft,  run  6 .'.'., 

'  27.  CaiDiiiena.  brok*tag«,  and  oiImt  cbaifca  doo  or  (o  Imoobo  dvo  t«  aceota  or  brokan  oa  pottciM  tfocCiTt  OQ 

or  tfur  Ottobar  I,  l» ns. 

ffc       Acridcat,      I :..;  Hmltb.  t. ;  LiabOitr,        t    ., ™.;  *■**■••  t .— « ; 

39.      Ftdcbty.       • SuroCf.  |...~ -.,  PUu  ciMt.     t :; I.;  SlMs  boihr,    •» ,_ 

3«.      la^^Mlf.   ..^ „.i  OwBl.  •.- ;  SpnnUw.       I, , ^ i  Tkh,       '        %„ ; 

31.    FirwhMi.    I :*s:^ra*  • — ;  ^tea:^      » — ■< ^.. ;LiT«tt«efc,  •   t .-„ 

S3.  SoUnoa,  renu.  MpoiMM,  bilb,  ooroiuu,  faca,  tic.,  dM  or  acerutd 

33   Eatuut«d  aoMMint  Unaftw  payable  for  Fedtral,  Sum,  and  eilMr  tasaa  baaad  upon  ika  bminiaa  of  tha  y^ta  of  tkb  lUUttaQt  (Ftderal) . 
UaSbowaoDwat  WasfterpayaUa  for  Fadtralukeooa  UxMaaparaurroai  all  otbartaxaaCStaUaad  otto)       .     .     r^   *.     .     .     .     . 

34.  Dtndan^  declared  aadtti^iatd  to  •tockholdan.t »,  t«  poli^h^dan,  I , ,  .  j-  ....^    .    '. 

U.  Dna  aod  to  boeona  di*a  for  borrow«d  nooar ,     ,,  ,,     ».'»•     ■     •     *■•*•     •     • 

M.  InlanM  d«a «« aoenad,     ..  t.     ...••.     .',...     «.^ 

37.  Reun  pnniaa, »  ..    •     ■.'... '..     •     *     .     .     .     . 


M.  Otk«ltebaHi«,*it.: 


«a.  Tor*!.  AittnnrT  OP  Au.  iUMunca,  Bsacrr  cartal, 

M.  CWpiUl  MtMlly  paid  up  is  CMk^ -.'...•.. 

M.  Swplua  OTar  aD  babOitMia. ,....>.. % ^ 

•1.  Sorplw  aa  r>tvda  poti4yho4<><^ •.•••«.* 

N.  ToTAk. i    .  *'. 


48 


liiii' 

"Pi. 

s  «  . 

1     i- 

«• 

hi. 

l'^' 

n-'- 

•> 

1  k . 

n. 

M 

M- 

1 

\H. 

-} 

1     1 
1     1  - 

1 
1 

-1 

\  ii«. . 

i 

»  s 
-5 

1  \^ 

i 

1   ^-^ 

1 

i  11 

-1 

i^     1 
.1 

\  '^'  ■ 

1 

1 

\  - 
1  ^ 

1 

1 

i   'i 

1 
1 

1  ii 

8° 

1 
J 

4 
i 

\ 

1 

1 

1 

■ 

1 

1 

1 

1 
i 

\ 

i 

I 

s 

1 
5 

1 

H 

a 
t  1 

\ 

. 

i 

I 


i 


49 


if 


f 

ll 

1 

t 
! 

J 

1 

1 

«• 

ill 

i 

•      i 

1 

1 

i 

\ 

•1 

s 

i 

1 

1 

,   1 

i 

'  i 

a 

I 

i 
! 

3 

21 

1 

i 

1 

i 
) 

t 

1 

1 

li 

i 

1 
1 

i 

Jl 

*  ' 

1 

^ 

•1 

n 

^_ 

«■ 

^ 

^i 

^ 

^ 

1 

1 

1 

•5 

im 

1 

1 

1 

if 

'J 

f 

i 

i 

9 

§5 

li  1 

i 
1 

1 

.  1 

1 
1 

=3 

1 

^ 

3 

i    < 

ii 

1 

i 

50 


1 

i 

J 

(i 

1 

U 

!1 

If,        .,  . ,  _ 

i 

]h 

f ' 

1 

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JJ 

'j 

\ 

I 

.  i 

1  '^ 

I' 

ti  , 

s  1  •' 

ti 

il 

1      ^ 

"3  "  ■- 

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1 

1 

1 

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1 

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1 

a 

1 

1 

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«»                                                                     *• 

1 

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ill 

ij 

1 

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pi 

1 

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1 

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51 


5S| 

r 


ii 


I 


Hi 


1^ 


HI 


ill 


52 


tWItVU.  STATIMIlrT  OF  THS 


SCHKDITLS  K 
Sliefwbti  oO  Etpenditura  in  Conneeticn  taith  MatUrt  Befon  Lefi^attvt  BodUt,  O/Jleen,  or  Deparlm*nU  of  Govtmment  Duibii  IP- 


r.r» 

VfW 

nssiSrSj 

.>KU^„.°! 

MAJlS 

U>»«M 

"""" 

' 

Total. 

• 

.  ADDITIONAL  COPIES 

OF  THIS  PUBLICATION  MAY  BE  PROCXTIED  FROM 

THE  SUPERINTENDENT  OF  DOCUMENTa 

GOVERNMENT  PRINTING  OFFICE 

WASHINGTON,  D.  C. 

AT 

10  CENTS  PER  COPY 


(« 


BULLETIN    H 


f> 


INCOME  TAX  RULINGS  PECULIAR  TO 
INSURANCE  COMPANIES. 


ERRATA  SLIP. 

PAGE  11,  PARAGRAPH  28,  SHOULD  READ  AS  FOLLOWS: 

28.  Invested  capital  of  stock  fire  insurance  companies. — The  invested 
capital  of  a  stock  fire  insurance  company  within  the  meaning  of  the 
statute  is  the  capital  paid  in  by  the  stockholders,  the  surplus  and  un- 
divided profits  of  prior  years  remaining  in  the  business  at  the  close 
of  the  previous  year,  and  the  unearned  premium  reserve,  less  the 
defined  deduction  for  inadmissible  assets  and  such  further  adjust- 
ments as  are  contemplated  by  the  statute.  The  computation  of  in- 
vested capital  will  be  based  upon  the  annual  statement  rendered  to 
the  insurance  department  at  the  close  of  the  previous  year. 

Generally  speaking,  the  invested  capital  of  a  stock  fire  insurance 
company  will  comprise  the  following: 

(a)  Gross  assets  at  the  close  of  the  previous  year. 

(6)  Plus:  Excess  of  cost  price  of  real  estate  and  securities  over 
book  value.  (The  result  will  be  the  gross  assets  on  the  basis 
of  actual  cost.) 

or 

(c)  Minus: 

(1)  Excess  of  market  value  of  real  estate  and  securities 

over  book  value. 

(2)  Excess  of  book  value  of  real  estate  and  securities 
over  cost  price. 

The  result  will  be  the  gross  assets  on  the  basis  of  actual  cost. 
{d)  Minus: 

(1)  Net  amount  of  unpaid  losses  and  claims  less  reserve 

for  unreported  losses; 

(2)  Amounts  reclaimable  by  the  insured  on  perpetual 

policies  J 

61302°— 21 


{d)  Minus — Continued. 

(3)  Unused  balances  of  bills  and  notes  included  in  ad- 

mitted assets  taken  in  advance  of  premiums  on  open 
marine  and  inland  policies  or  otherwise,  returnable 
on  settlement; 

(4)  Interest,  salaries  and  rents  due  or  accrued; 

(5)  Estimated  amount  hereafter  payable  for  all  taxes 

other  than  Federal  income  and  profits  taxes; 

(6)  Contingent  commissions  or  other  charges  due  or  ac- 
/  crued ; 

(7)  Funds  held  under  reinsurance  treaties ; 

(8)  Amounts  due  and  to  become  due  for  borrowed  money, 
(e)  Minus:  Depreciation  computed  on  the  cost  of  the  buildings 

from  the  date  of  acquisition  to  the  beginning  of  the  taxable 
year. 
(/)  ir*lus  or  minus:  Changes  in  invested  capital  during  the  year, 
as  follows: 
Additions : 

(1)  By  sale  of  capital  stock  for  cash  or  other  assets; 

(2)  By  payment  of  assessments  or  surplus  by  stock- 

holders. 
Deductions : 

(1)  By  payment  of  cash  dividends  out  of  earnings  of 

prior  years,  or  the  first  60  days  of  the  taxable 
year ; 

(2)  By    proportionate    part    of    Federal    income   and 

profits  taxes  due  and  payable. 
(g)  Minus:  Percentage  of  inadmissible  assets  computed  in  ac- 
cordance with  section  326(c). 


PAGE  13,  PARAGRAPH  41,  SHOULD  READ  AS  FOLLOWS: 

41.  Invested  capital. — The  invested  capital  of  a  stock  casualty  insur- 
ance company  comprises  the  following : 

(a)  Gross  assets  at  the  close  of  the  preceding  year. 
(6)  Plus:  Excess  of  cost  price  of  real  estate  and  securities  over 
book  value.     (The  result  will  be  the  gross  assets  on  the 
basis  of  actual  cost.) 

or 
(c)  Minus: 

(1)  Excess  of  market  value  of  real  estate  and  securities 

over  book  value  as  indicated  by  items  39  and  40 
on  page  4  of  the  annual  statement,  convention 
edition ; 

(2)  Excess  of  book    value  of  real  estate  and  securities 

over  cost. 
The  result  will  be  the  gross  assets  on  the  basis  of  actual  cost. 


(d)  Minus: 

(1)  Estimated  expenses  of  investigation  and  adjustment 

of  unpaid  claims ; 

(2)  Commissions,  brokerage,  and  other  charges  due,  or 

to  become  due,  to  agents  or  brokers ; 

(3)  Salaries,  rents,  expense  bills,  etc.,  due  or  accrued; 

(4)  Estimated  amount  hereafter  payable  for  taxes   (ex- 

clusive of  P'ederal  income  and  profits  taxes)  ; 

(5)  Amounts  due  or  to  become  due  for  borrowed  money; 

(6)  Interest  due  or  accrued ; 

(7)  Returned  premiums  and  reinsurance. 

(e)  Minus:  Depreciation  computed  on  the  cost  of  buildings  from 

the  date  of  acquisition  to  the  beginning  of  the  taxable  year. 
(/)  Plus  or  minus:  Changes  in  invested  capital  during  the  year, 
computed  in  accordance  with  the  regulations  applicable  to 
corporations  in  general,  as  follows : 
Additions : 

(1)  By  sale  of  capital  stock  for  cash  or  other  assets; 

(2)  By  payment  of  assessments  or  surplus  by  stock- 

holders. 
Deductions : 

(3)  By  payment  of  cash  dividends  out  of  the  earnings 

of  previous  years  or  the  first  60   days  of  the 
taxable  year; 

(4)  By    proportionate    part    of    Federal    income    and 

profits  taxes  due  and  payable. 
(g)  Minus:  Inadmissible  assets  computed  in  accordance  with  sec- 
tion 326(c), 


I 


WABHlNOTO!»  :  OOTBKXMBNT  PRtMTIJfO  OFTICE  :  IWl 


